About this calculator
FHA loans are insured by the Federal Housing Administration, and the insurance is not optional or free: you pay a 1.75% upfront mortgage insurance premium (UFMIP) — almost always financed into the loan, so you borrow it and pay interest on it for decades — plus an annual MIP collected monthly. Under HUD Mortgagee Letter 2023-05, which cut premiums in March 2023, the annual rate for a typical 30-year loan at or below the $726,200 base-loan threshold is 0.50% at 95% LTV or less and 0.55% above 95% LTV; larger loans pay 0.70–0.75%. (Read older guides with care: before March 2023 the headline rate was 0.85%, and some pages still quote it.)
How long MIP lasts is the FHA trap. If your loan starts at 90% LTV or below, annual MIP cancels after 11 years. If it starts above 90% LTV — which includes the classic 3.5%-down purchase, at 96.5% LTV — MIP runs for the life of the loan. It never falls away on its own; the exits are refinancing into a conventional loan once you hold 20% equity, selling, or paying the loan off. That single rule is why the extra down payment that gets an FHA loan to exactly 90% LTV is worth so much more than it looks, and why most FHA borrowers plan a conventional refinance from day one.
How to use it
- Enter the price and down payment, and pick your credit band — the calculator enforces the 3.5% / 10% minimums.
- Set the rate and term; terms over 15 years and 15 or under use different rows of HUD's MIP table.
- Read the monthly MIP and its duration first, then the all-in payment; the year table shows MIP ending in year 12 when the 11-year rule applies.
The formula
The upfront premium is 1.75% of the base loan amount (price minus down payment) and is added to the balance before the payment is computed, per HUD's standard practice. The annual premium is charged on the outstanding balance each month, so it shrinks slowly as the loan amortizes; it stops after 11 years if origination LTV was 90% or less, and never stops (short of payoff or refinance) above 90%. The $726,200 line in the table is the base-loan threshold printed in Mortgagee Letter 2023-05.
Worked example
A $400,000 home with 3.5% down ($14,000): the base loan is $386,000, the upfront MIP adds $6,755, and you actually borrow $392,755. At 6.5% over 30 years, principal and interest are $2,482.48 a month. LTV is 96.5%, so annual MIP is 0.55% — $176.92 a month at first, and because LTV is above 90%, it runs for the life of the loan, totalling about $42,387. With $3,600 a year of tax and $1,800 of insurance, the true monthly payment is $3,109.40.
Sources: HUD Mortgagee Letter 2023-05 MIP table (in force since March 20, 2023) and HUD 4000.1; 2026 FHA loan limits per Mortgagee Letter 2025-23 (floor $541,287, ceiling $1,249,125, one-unit). Last updated: October 2026.
Frequently asked questions
How long does FHA MIP last?
It depends on the LTV the day the loan closes. At 90% LTV or below, annual MIP is charged for 11 years and then drops off. Above 90% LTV — including every 3.5%-down purchase — it lasts the life of the loan. These rules apply to FHA loans endorsed since June 3, 2013; the only exits are a conventional refinance at 20% equity, selling, or paying the loan off.
Can I avoid the upfront MIP?
No — the 1.75% upfront premium is charged on every FHA loan. You can pay it in cash at closing instead of financing it, which saves the interest on it (about $1,900 of interest on a typical loan), but almost everyone finances it. A lender credit or seller concession can offset it in cash terms without changing the charge itself.
Is FHA or conventional cheaper with 5% down?
Often conventional, if your credit is decent: conventional PMI at 95% LTV with a 760 score costs about 0.38% a year and cancels at 80% LTV, while FHA charges 0.50% annually plus the 1.75% upfront — and the FHA premium cannot cancel on a >90% LTV loan at all. FHA wins when credit is weak (its pricing barely distinguishes a 620 from a 760 score) or when DTI is high, because FHA underwriting is more forgiving. Price both with your real credit score.
What are the FHA loan limits?
For 2026 (Mortgagee Letter 2025-23), the one-unit floor is $541,287 in most counties and the ceiling is $1,249,125 in high-cost areas; many counties sit between. Your property's county limit caps the base loan amount, not the price. Two-to-four-unit properties have higher limits.
Does the annual MIP rate ever change on my loan?
No. Your annual MIP rate is fixed at closing from the table in force then — the March 2023 cut to 0.50–0.55% helped new borrowers only; existing borrowers had to refinance into a new FHA loan (a streamline refinance) to capture it. The monthly dollar amount declines as your balance falls, but the rate does not.
What formula does this fha loan calculator use?
Loan = (price − down) × 1.0175. Annual MIP rate from the HUD table by term, base-loan size and LTV; monthly MIP = outstanding balance × annual rate ÷ 12. The upfront premium is 1.75% of the base loan amount (price minus down payment) and is added to the balance before the payment is computed, per HUD's standard practice. The annual premium is charged on the outstanding balance each month, so it shrinks slowly as the loan amortizes; it stops after 11 years if origination LTV was 90% or less, and never stops (short of payoff or refinance) above 90%. The $726,200 line in the table is the base-loan threshold printed in Mortgagee Letter 2023-05. The worked example on this page applies the formula step by step with real numbers, so you can verify the result by hand.