FHA Loan Calculator Formula

Understand the math behind the fha loan calculator. Each variable explained with a worked example.

Use the FHA Loan Calculator

Formulas Used

Total Monthly Payment (P&I + MIP)

total_monthly = monthly_pi + monthly_mip

Monthly P&I

pi_payment = monthly_pi

Monthly MIP

mip_payment = monthly_mip

Upfront MIP (financed)

ufmip_cost = ufmip

Total Loan (with UFMIP)

total_loan_amount = total_loan

Down Payment Amount

down_payment_amt = down_payment

Variables

VariableDescriptionDefault
home_priceHome Purchase Price(USD)300000
down_payment_pctDown Payment(%)3.5
interest_rateInterest Rate(%)6.5
loan_term_yearsLoan Term(years)30
annual_mip_rateAnnual MIP Rate(%)0.55
down_paymentDerived value= home_price * down_payment_pct / 100calculated
base_loanDerived value= home_price - down_paymentcalculated
ufmipDerived value= base_loan * 0.0175calculated
total_loanDerived value= base_loan + ufmipcalculated
rDerived value= interest_rate / 100 / 12calculated
nDerived value= loan_term_years * 12calculated
monthly_piDerived value= r > 0 ? total_loan * r * pow(1 + r, n) / (pow(1 + r, n) - 1) : total_loan / ncalculated
monthly_mipDerived value= base_loan * annual_mip_rate / 100 / 12calculated

How It Works

FHA Loan Overview

FHA loans are government-insured mortgages designed for borrowers with lower credit scores or smaller down payments.

FHA Mortgage Insurance

  • Upfront MIP (UFMIP): 1.75% of the base loan amount, typically financed into the loan
  • Annual MIP: 0.15% to 1.05% depending on loan term, LTV, and loan amount, paid monthly

    • Key FHA Features

  • Minimum 3.5% down payment (credit score 580+)
  • Minimum 10% down (credit score 500-579)
  • More lenient debt-to-income requirements
  • MIP required for the life of the loan if down payment is under 10%
  • MIP drops after 11 years if down payment is 10% or more

    • Worked Example

    A $300,000 home with 3.5% down, 6.5% rate, 30-year term, 0.55% annual MIP.

    home_price = 300000down_payment_pct = 3.5interest_rate = 6.5loan_term_years = 30annual_mip_rate = 0.55
    1. 01Down payment: $300,000 x 3.5% = $10,500
    2. 02Base loan: $300,000 - $10,500 = $289,500
    3. 03UFMIP: $289,500 x 1.75% = $5,066
    4. 04Total loan: $289,500 + $5,066 = $294,566
    5. 05Monthly P&I: $294,566 over 360 months at 6.5% = $1,862.25
    6. 06Monthly MIP: $289,500 x 0.55% / 12 = $132.69
    7. 07Total monthly: $1,862.25 + $132.69 = $1,994.94

    Ready to run the numbers?

    Open FHA Loan Calculator