Your real FHA payment, mortgage insurance and all.
FHA loans get you in with 3.5% down, but they carry an upfront premium financed into the loan and a monthly premium for the life of the loan. Enter your numbers and see the whole payment, what the insurance really costs, and how your balance falls year by year.
Your FHA loan
What this FHA loan really costs
The numbers over time
Balance and equity
Where each year's money goes
Each bar is one year of payments. Early on almost all of it is interest and MIP; the split shifts toward principal as the balance falls.
Key milestones
Year-by-year breakdown
Principal and interest are on the full loan including the financed upfront MIP. The monthly MIP is added on top.
| Year | Payment | Principal | Interest | MIP paid | Balance |
|---|
FHA loans, explained
How FHA Loans Work
FHA loans are government-backed mortgages insured by the Federal Housing Administration, designed to make homeownership accessible to borrowers with lower credit scores and smaller down payments. Lenders face less risk because the FHA guarantees a portion of the loan, which allows them to offer more favorable terms. Borrowers can qualify with as little as 3.5% down and a credit score of 580, making FHA loans one of the most popular options for first-time homebuyers across the United States.
FHA Mortgage Insurance Premiums Explained
FHA loans require two types of mortgage insurance: an upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount, and an annual mortgage insurance premium (MIP) of 0.55% for most loans. The upfront premium is typically financed into the loan balance, while the annual premium is divided by 12 and added to your monthly payment. For loans with less than 10% down originated after June 2013, MIP lasts the entire life of the loan and can only be removed by refinancing into a conventional mortgage.
FHA vs Conventional Loan Comparison
FHA loans offer lower credit score requirements (580 vs 620) and smaller down payments (3.5% vs 3-5%), but come with mandatory mortgage insurance for the life of the loan. Conventional loans allow PMI removal once you reach 20% equity, which can save thousands over the long term. For borrowers with credit scores above 700 and at least 5% down, a conventional loan often results in lower total costs. FHA loans remain the better choice for buyers with limited savings or credit challenges.
FHA Loan Requirements and Eligibility
To qualify for an FHA loan, borrowers need a minimum credit score of 580 for the 3.5% down payment option, or 500-579 with 10% down. The property must be a primary residence and meet FHA appraisal standards for safety and habitability. Borrowers must demonstrate steady employment history, typically two years, and maintain a debt-to-income ratio generally below 43%. FHA loan limits vary by county, ranging from $498,257 in low-cost areas to $1,149,825 in high-cost markets.
Common questions
What is the FHA upfront mortgage insurance premium?
The FHA charges an upfront MIP of 1.75% of the base loan amount, which is typically financed into the loan. On a $289,500 loan, the upfront MIP would be approximately $5,066, bringing your total loan to about $294,566.
How much is the annual FHA mortgage insurance?
For most FHA loans with more than 95% LTV and a term over 15 years, the annual MIP rate is 0.55% of the loan amount. This is divided by 12 and added to your monthly payment for the life of the loan.
Can I remove FHA mortgage insurance?
For FHA loans originated after June 2013 with less than 10% down, MIP lasts the entire life of the loan. The only way to eliminate it is to refinance into a conventional loan once you have 20% equity.
What credit score do I need for an FHA loan?
FHA loans require a minimum credit score of 580 for the 3.5% down payment option. Borrowers with scores between 500-579 may qualify with a 10% down payment. These flexible requirements make FHA loans popular with first-time homebuyers.
What are FHA loan limits?
FHA loan limits vary by county. In 2024, the floor limit is $498,257 for single-family homes in low-cost areas, while the ceiling is $1,149,825 in high-cost areas. Check your county's specific limit on the HUD website.
Estimates for planning only. FHA premiums, property tax and insurance vary by lender, loan and location, and MIP rules depend on your down payment and loan term. Confirm exact figures with your lender before you commit.