FHA loans, backed by the Federal Housing Administration, require only 3.5% down for borrowers with credit scores of 580+. However, they include Mortgage Insurance Premiums (MIP) — both an upfront and annual premium. This calculator shows your true monthly cost including the mandatory MIP insurance.
Monthly FHA Payment:
Monthly MIP Insurance:
How to Use This Tool
Enter the home price you are purchasing.
Enter your down payment percentage (3.5% minimum for credit score 580+).
Enter the FHA loan interest rate offered by your lender.
Enter the loan term (typically 30 years).
Enter the annual MIP rate (typically 0.55% for most loans).
Click Calculate to see your total monthly FHA payment including insurance.
The Formula
FHA monthly payment = principal+interest + monthly MIP. MIP = Loan Amount x Annual MIP Rate / 12. The base loan payment uses the amortization formula: M = P x [r(1+r)^n] / [(1+r)^n - 1].
Why It Matters
As a first-time buyer with $8,750 saved (3.5% of a $250,000 home), an FHA loan lets you qualify with a 580 credit score. Your $152,250 FHA loan at 6.5% includes $110/month MIP insurance. Compare this against a conventional loan requiring $25,000 down (20%) to avoid PMI.