FHA Mortgage Payment & MIP
Last reviewed: April 2026
Calculate FHA loan payments including upfront and annual mortgage insurance premiums (MIP). See how FHA loans compare to conventional mortgages for low down payment buyers. This calculator runs entirely in your browser — your data stays private, and no account is required.
FHA loans are government-insured mortgages designed to make homeownership accessible to borrowers with lower credit scores and smaller down payments. The minimum down payment is just 3.5% with a 580+ credit score, compared to the conventional minimum of 3-5% with typically 620+ credit.[1] The tradeoff is mortgage insurance: FHA loans require both an upfront MIP of 1.75% (usually financed into the loan) and an annual MIP of 0.55% that remains for the life of the loan in most cases — unlike conventional PMI, which can be removed at 80% LTV.[2] FHA loan limits vary by county, ranging from $498,257 to $1,149,825 in high-cost areas for 2026, and the property must be a primary residence.[3] Use the Mortgage Calculator to compare FHA vs conventional payment scenarios.
The biggest drawback of FHA loans is the required mortgage insurance premium (MIP). An upfront MIP of 1.75% of the loan amount is financed into the loan at closing. Monthly MIP ranges from 0.45–1.05% annually depending on the loan term, loan-to-value ratio, and loan amount. Unlike conventional PMI (which can be removed at 20% equity), FHA MIP on loans with less than 10% down lasts for the entire life of the loan — you cannot cancel it without refinancing into a conventional loan once you have sufficient equity. This lifetime MIP makes FHA loans more expensive over time than conventional loans for borrowers who could qualify for either. Compare scenarios with our Mortgage Calculator.
| Requirement | Minimum | Typical/Preferred |
|---|---|---|
| Credit score | 500 (10% down) / 580 (3.5% down) | 620+ |
| Down payment | 3.5% | 3.5–10% |
| DTI ratio | Up to 57% | Under 43% |
| MIP (upfront) | 1.75% | Financed into loan |
| MIP (annual) | 0.55% | Life of loan (most cases) |
FHA (Federal Housing Administration) loans are government-backed mortgages designed to make homeownership accessible to borrowers who may not qualify for conventional financing. The key advantages include a minimum down payment of just 3.5% (compared to 5-20% for conventional loans), credit score minimums as low as 500 (with 10% down) or 580 (with 3.5% down), more flexible debt-to-income ratio requirements (up to 43-50% versus 36-43% for conventional), and the ability to use gift funds for the entire down payment. FHA loans are assumable, meaning a future buyer can take over your mortgage at its existing interest rate — a significant advantage when rates rise. However, FHA loans require mortgage insurance premiums (MIP) for the entire life of the loan (unlike conventional PMI which can be removed at 80% LTV), which increases the total cost of borrowing.
| Down Payment | Upfront MIP | Annual MIP | MIP Duration | Monthly Cost ($300K Loan) |
|---|---|---|---|---|
| 3.5% (LTV > 95%) | 1.75% of loan | 0.55% | Life of loan | $138/month |
| 5-9.99% (LTV 90-95%) | 1.75% of loan | 0.50% | Life of loan | $125/month |
| 10%+ (LTV ≤ 90%) | 1.75% of loan | 0.50% | 11 years | $125/month (11 yrs) |
The upfront MIP of 1.75% is typically financed into the loan amount. On a $300,000 loan, this adds $5,250 to the balance. The annual MIP of 0.50-0.55% translates to approximately $125-$138 per month on a $300,000 loan. The lifetime MIP requirement (for down payments under 10%) is the primary financial disadvantage of FHA loans — many borrowers refinance into a conventional loan once they reach 20% equity to eliminate ongoing mortgage insurance.
FHA loans are advantageous for first-time homebuyers with limited savings, borrowers with credit scores between 580-680 (where conventional loans either deny or charge significantly higher rates), buyers in high-cost areas who need the higher FHA loan limits ($1,149,825 in 2024 for high-cost areas), and borrowers recovering from financial setbacks (FHA allows mortgage qualification 2 years after bankruptcy versus 4-7 years for conventional). Conventional loans become advantageous once the borrower has a 680+ credit score, 5-20% down payment, and a DTI under 43% — at this point, conventional PMI is typically cheaper than FHA MIP and can be canceled at 80% LTV. The crossover point where conventional beats FHA usually occurs around a 700 credit score with 10%+ down payment. For borrowers right at the boundary, running both scenarios through the respective calculators reveals which option costs less over the intended holding period.
FHA loan limits vary by county and are updated annually based on conforming loan limits. In 2024, the floor limit (lowest-cost areas) is $498,257 for a single-family home, and the ceiling limit (highest-cost areas) is $1,149,825. Multi-unit properties have higher limits: $637,950-$1,472,250 for duplexes, $771,125-$1,779,525 for triplexes, and $958,350-$2,211,600 for fourplexes in low-to-high-cost areas. FHA loans require the property to be the borrower's primary residence (no investment properties or vacation homes), meet minimum property standards assessed during an FHA appraisal (which is more stringent than conventional appraisals, requiring adequate heating, safe water supply, functioning utilities, and structural soundness), and be within FHA loan limits for the property's county. Properties with significant deferred maintenance, safety hazards, or structural issues may not pass FHA appraisal, requiring repairs before closing. For related mortgage analysis, see our Mortgage Calculator and Down Payment Calculator.
FHA streamline refinancing allows existing FHA borrowers to refinance into a new FHA loan with minimal documentation and no new appraisal requirement. The streamline must result in a "net tangible benefit" — typically a reduction in the monthly principal and interest payment of at least 5%, or a switch from an adjustable-rate to a fixed-rate mortgage. Benefits include no income verification, no employment verification, no credit score minimum (though lenders may impose their own overlays), no new home appraisal, reduced paperwork, and faster closing times (often 2-4 weeks). The upfront MIP for a streamline refinance is reduced to 0.01% if refinancing within 3 years of the original loan closing. Closing costs still apply ($2,000-$5,000 typical) but can be rolled into the new loan balance. The streamline is one of the simplest refinance options available and can save FHA borrowers hundreds per month when interest rates decline. For detailed refinancing analysis, see our Refinance Calculator.
Several misconceptions prevent qualified borrowers from considering FHA loans. FHA loans are not just for first-time homebuyers — repeat buyers can use FHA financing with no limit on how many times they have previously purchased homes, though they can generally only have one FHA loan at a time. FHA loans are not "subprime" loans — they use the same interest rate markets as conventional mortgages, and FHA rates are often equal to or lower than conventional rates for borrowers with similar credit profiles. FHA loans do not require the seller to pay closing costs — while sellers can contribute up to 6% of the sale price toward buyer closing costs (versus 3% for conventional loans with less than 10% down), this is negotiated between buyer and seller, not mandated. The property condition requirements, while more stringent than conventional appraisals, do not require the home to be perfect — they focus on health, safety, and structural soundness rather than cosmetic issues.
See also: Mortgage Calculator · Down Payment Calculator · VA Mortgage Calculator
→ FHA mortgage insurance is the major cost difference. Upfront MIP is 1.75% of the loan (rolled into the balance), plus annual MIP of 0.55% for 30-year loans with less than 10% down — paid for the life of the loan. On a $300K loan, that's $5,250 upfront + $138/month ongoing.
→ FHA MIP lasts the full loan term for most borrowers. Unlike conventional PMI (which drops at 80% LTV), FHA MIP never cancels if you put less than 10% down. The only way to eliminate it is to refinance into a conventional loan once you have 20% equity.
→ FHA allows lower credit scores and higher DTI. FHA accepts credit scores down to 500 (with 10% down) and DTI ratios up to 50% with compensating factors. This makes homeownership accessible to borrowers who don't qualify for conventional financing.
→ Compare FHA vs conventional breakeven points. If you have 5–10% down and a 680+ credit score, a conventional loan with PMI may cost less than FHA over time because conventional PMI cancels. Use our Mortgage Calculator and PMI Calculator to compare.
See also: Mortgage Calculator · PMI Calculator · Home Affordability · VA Mortgage