How the calculator works
An FHA loan is insured by the Federal Housing Administration, part of HUD. You pay for that insurance twice: an upfront mortgage insurance premium (UFMIP) at closing, and an annual premium (MIP) split into your monthly payments.
- Base loan = price minus your down payment (at least 3.5%).
- Upfront MIP = 1.75% of the base loan. You can add it to the loan or pay it at closing.
- The annual MIP rate comes from HUD's table below, based on term, base loan amount and loan-to-value (base loan ÷ price).
- Monthly MIP follows the method HUD publishes for periodic MIP (your lender's figure may differ by a few dollars): average the year's 12 scheduled balances, multiply by the annual rate, divide by 1.0175 if the upfront premium was financed, then divide by 12. It falls a little each year as you pay down the loan.
- Principal and interest is on the total loan (including financed UFMIP). Tax, insurance and HOA are added on top.
FHA annual MIP rates
| Base loan | LTV | Annual MIP | Lasts |
|---|---|---|---|
| $726,200 or less | 90% or less | 0.50% | 11 years |
| $726,200 or less | Over 90% to 95% | 0.50% | Loan term |
| $726,200 or less | Over 95% | 0.55% | Loan term |
| Over $726,200 | 90% or less | 0.70% | 11 years |
| Over $726,200 | Over 90% to 95% | 0.70% | Loan term |
| Over $726,200 | Over 95% | 0.75% | Loan term |
| Base loan | LTV | Annual MIP | Lasts |
|---|---|---|---|
| $726,200 or less | 90% or less | 0.15% | 11 years |
| $726,200 or less | Over 90% | 0.40% | Loan term |
| Over $726,200 | 78% or less | 0.15% | 11 years |
| Over $726,200 | Over 78% to 90% | 0.40% | 11 years |
| Over $726,200 | Over 90% | 0.65% | Loan term |
These rates apply to case numbers endorsed on or after March 20, 2023. The $726,200 figure is the base-loan threshold printed in that letter, which ties it to the national conforming loan limit. It is not the FHA loan limit, which is set by county.
Worked example
You buy a $400,000 home with 3.5% down on a 30-year FHA loan at 6.5%, and finance the upfront premium.
- Base loan: $386,000. Loan-to-value: 96.5%.
- Upfront MIP: $386,000 × 1.75% = $6,755. Total loan: $392,755.
- Principal and interest: about $2,482 a month.
- Annual MIP rate: 0.55% for the life of the loan (over 95% LTV). Year-one MIP is about $176 a month, falling to about $148 a month by year 11.
- With $6,000 a year in property tax and $1,800 in insurance, the first-year payment is about $3,308.
Put 10% down instead and the base loan drops to $360,000, the rate falls to 0.50%, and annual MIP stops after 11 years. Year-one MIP is about $149 a month.
Edge cases
- FHA MIP is not PMI. The Homeowners Protection Act's 78% automatic cancellation doesn't apply. If MIP lasts for the life of the loan, the usual way out is refinancing into a conventional loan once you have enough equity.
- Loan limits. FHA caps the loan amount by county. Look yours up with HUD's mortgage limits tool.
- Condos and co-ops. FHA has separate approval rules for condominium projects. See FHA and VA loans for NYC condos and co-ops.
- Closing costs other than UFMIP are not included. Add them with the closing cost calculator.
What to do next
Compare with a conventional loan using the PMI calculator. If you have served in the military, check the VA loan calculator, which has no monthly mortgage insurance. Read what credit score you need before you apply.