Transparent method
The formula
Worked example
Example inputs
How to interpret the result
An FHA loan's true monthly cost includes upfront and annual mortgage insurance layered on top of principal and interest, so comparing an FHA payment against a conventional loan's principal-and-interest figure alone understates the FHA loan's real monthly cost relative to the alternative.
Before you rely on it
What to check
Compare the FHA loan's full payment, including both insurance components, against a conventional loan's full payment including any PMI it would carry, not principal and interest alone on either side.
The common error
Where people go wrong with FHA loan calculator
Comparing an FHA payment estimate against a conventional loan quote that only shows principal and interest. Both loans need their full insurance costs included for the comparison to mean anything.
Sensitivity evidence
How mortgage rate changes the estimated total monthly payment
| Mortgage rate | Estimated total monthly payment | Financed FHA loan amount | Monthly mortgage insurance |
|---|---|---|---|
| 4.3% | $2,395 | $343,661 | $155 |
| 5.3% | $2,603 | $343,661 | $155 |
| 6.3%worked example | $2,821 | $343,661 | $155 |
| 7.3% | $3,049 | $343,661 | $155 |
| 8.3% | $3,287 | $343,661 | $155 |
Every input, tested
Which input moves the estimated total monthly payment most
| Input | Tested from | To | Estimated total monthly payment at each end | Swing |
|---|---|---|---|---|
| Home price | $315,000 | $385,000 | $2,594 to $3,048 | $454 (16%) |
| Mortgage rate | 5.3% | 7.3% | $2,603 to $3,049 | $447 (16%) |
| Loan term | 22.0 years | 38.0 years | $3,103 to $2,680 | $424 (15%) |
| Annual MIP rate | 0.300% | 0.800% | $2,750 to $2,891 | $141 (5.0%) |
| Annual property tax | $4,500 | $5,500 | $2,779 to $2,862 | $83 (3.0%) |
| Down payment | 2.5% | 4.5% | $2,844 to $2,797 | $47 (1.7%) |
| Annual home insurance | $1,440 | $1,760 | $2,807 to $2,834 | $27 (0.9%) |
| Upfront MIP rate | 1.5% | 2.0% | $2,816 to $2,826 | $10 (0.4%) |
Two variables at once
Estimated total monthly payment by mortgage rate and home price
| Mortgage rate \ Home price | $280,000 | $350,000 | $420,000 |
|---|---|---|---|
| 4.3% | $2,026 | $2,395 | $2,764 |
| 5.3% | $2,192 | $2,603 | $3,013 |
| 6.3% | $2,367 | $2,821 | $3,275 |
| 7.3% | $2,549 | $3,049 | $3,549 |
| 8.3% | $2,739 | $3,287 | $3,834 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Home price | $350,000 |
| Down payment | 3.5% |
| Mortgage rate | 6.3% |
| Loan term | 30.0 years |
| Upfront MIP rate | 1.8% |
| Annual MIP rate | 0.550% |
| Annual property tax | $5,000 |
| Annual home insurance | $1,600 |
| Estimated total monthly payment | $2,821 |
| Financed FHA loan amount | $343,661 |
| Monthly mortgage insurance | $155 |
Where the inputs come from
Home price and down payment are the contract terms. FHA allows down payments as low as 3.5% for borrowers with a credit score of 580 or higher, and 10% for scores from 500 to 579, and lenders may set higher score minimums. The annual property tax and insurance come from a county record and an insurance quote; the mortgage insurance premiums are entered separately.
Using the estimated total monthly payment in a real decision
FHA often wins with lower credit scores and loses when credit is strong.
When the result stops applying
FHA loans have county-based loan limits and require the home to meet HUD property standards, checked in an FHA appraisal. Seller concessions are capped at 6% of the price. The property must be your primary residence. The insurance premiums and their duration are the main long-term cost of the program.
What to compare it with
Get an FHA quote and a conventional quote at the same down payment and compare the total monthly payment and cash to close. FHA is designed to help borrowers with lower scores or smaller savings, so it makes the most sense when those apply. The FHA mortgage insurance calculator focuses on the insurance premium, and the home affordability calculator shows what payment your income supports before you choose a program.
People also ask
Frequently asked questions
What credit score do I need for an FHA loan?
The program allows 580 for a 3.5% down payment and 500 to 579 with 10% down, though many lenders require more.
Can I use gift money for the down payment?
Yes. FHA allows gift funds for the down payment from family members and some other approved donors, documented with a gift letter stating that no repayment is expected. Lenders also verify where the money came from before closing.
Are there FHA loan limits?
Yes. FHA sets a maximum loan amount for each county, with higher ceilings in high-cost areas, and updates the limits every year. Look up your county's limit before shopping so you know whether a price range is financeable.