How is FHA MIP calculated?

There are two premiums. The upfront MIP is 1.75 percent of the base loan, usually financed into the loan. The annual MIP is the base loan times a HUD-set rate (0.55 percent for most 30-year borrowers), divided by 12 and added to each monthly payment. For example, on a 386,000 base loan the upfront MIP is about 6,755 and the monthly MIP is about 177.

What is the FHA down payment?

FHA requires a minimum of 3.5 percent of the purchase price, which corresponds to a 96.5 percent loan-to-value. A larger down payment lowers your loan and can change your MIP: put down 10 percent or more (a loan-to-value of 90 percent or less) and the annual MIP is paid for 11 years instead of the life of the loan.

Does FHA MIP go away?

It depends on your down payment. With less than 10 percent down, the annual MIP lasts the life of the loan and does not cancel on its own. With 10 percent or more down, it ends after 11 years. Unlike conventional PMI, FHA MIP does not automatically drop off when you reach 20 percent equity, so many borrowers refinance into a conventional loan to remove it once they have enough equity.

FHA versus conventional: which mortgage insurance is better?

FHA is often easier to qualify for with a lower credit score and 3.5 percent down, but its MIP usually cannot be cancelled and includes an upfront premium. Conventional loans charge PMI only when you put down less than 20 percent, and that PMI cancels automatically once your equity reaches about 20 to 22 percent. A borrower with strong credit and some equity often pays less over time with a conventional loan, while FHA can be the better entry point with weaker credit.

What does my result mean?

The total monthly payment is what you would pay each month including both premiums, taxes, and insurance. The monthly MIP line shows the annual premium, and the duration note tells you whether it lasts 11 years or the life of the loan based on your down payment. If it is life of loan, factor in that cost or a future refinance when comparing FHA to a conventional loan.

FHA Loan Calculator

Estimate an FHA loan payment including upfront and annual mortgage insurance (MIP), and see whether MIP lasts 11 years or the life of the loan.

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Total monthly payment

$3,176.07

Principal and interest: $2,482.48
Monthly MIP: $176.92
Property tax: $366.67
Homeowners insurance: $150.00
HOA dues: $0.00
Base loan amount: $386,000.00
Upfront MIP (1.75 percent): $6,755.00
Upfront MIP financed: $6,755.00
Total loan (with financed MIP): $392,755.00
How long you pay MIP: Paid for the life of the loan (down payment under 10 percent)

Loan balance over time

Monthly payment breakdown

Item	Amount
Principal and interest	$2,482.48
Monthly MIP	$176.92
Property tax	$366.67
Homeowners insurance	$150.00
HOA dues	$0.00
Total monthly payment	$3,176.07

Quick answer: With the example inputs this page loads by default, the headline result (Total monthly payment) comes to $3,176.07. Estimate an FHA loan payment including upfront and annual mortgage insurance (MIP), and see whether MIP lasts 11 years or the life of the loan. Change any input above and every figure updates instantly in your browser.

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An FHA loan payment carries a piece conventional loans do not: mortgage insurance. You pay an upfront premium of 1.75 percent of the loan, usually added to the balance, plus an annual premium built into your monthly payment. So the full payment is principal and interest, the monthly MIP, property tax, homeowners insurance, and any HOA dues. This calculator builds each piece from HUD's current MIP rates and shows how long the MIP lasts.

What this result means

The headline is your full monthly FHA payment, and the monthly MIP line is the part that sets FHA apart from a conventional loan. The upfront MIP of 1.75 percent is usually financed into the loan, so it quietly raises your principal and interest for the whole term. The bigger consequence is duration: with less than 10 percent down (a loan-to-value above 90 percent), the annual MIP is paid for the life of the loan and does not fall off on its own, unlike conventional PMI, which a lender cancels once you reach about 20 percent equity. Putting 10 percent or more down instead ends the MIP after 11 years. Many borrowers who start with an FHA loan and low equity later refinance into a conventional loan to drop the insurance once their equity supports it. MIP rates are set by HUD and change by mortgagee letter, so confirm the current figures for your case. This is an estimate for education, not a loan offer or financial advice.

Assumptions

The full monthly payment is principal and interest, the monthly MIP, property tax, homeowners insurance, and HOA dues. The interest rate is fixed for the whole term, interest is charged monthly on the remaining balance, and each payment is made at the end of the month.
FHA requires a down payment of at least 3.5 percent of the price (a maximum loan-to-value of 96.5 percent). If you enter less, the calculator raises it to the 3.5 percent minimum. The base loan is the price minus the down payment.
The upfront mortgage insurance premium (UFMIP) is 1.75 percent of the base loan (HUD Mortgagee Letter 2013-04 and Handbook 4000.1). By default it is financed, meaning it is added to the loan, so the amortized principal is the base loan plus the upfront MIP and the principal and interest are figured on that larger amount. You can instead pay it at closing, which keeps the loan at the base amount.
The annual MIP is the base loan times the HUD annual MIP rate, and the monthly MIP is that divided by 12. The rate comes from HUD Mortgagee Letter 2023-05 (effective for case numbers assigned on or after March 20, 2023) and depends on the term, the base loan size, and the loan-to-value. For the common case, a term over 15 years with a loan-to-value above 95 percent and a base loan at or below 726,200 dollars, the rate is 0.55 percent.
The monthly MIP is a level first-year estimate: it is based on the base loan amount and held flat. HUD actually recalculates the annual MIP each year on the average outstanding balance, so the real premium declines slowly over time, and the annual MIP is charged on the base loan rather than on any financed upfront MIP.
MIP duration follows HUD's rule for terms over 15 years: with a loan-to-value at origination of 90 percent or less (a down payment of 10 percent or more) the annual MIP is paid for 11 years, and above 90 percent (a down payment under 10 percent) it is paid for the life of the loan. This calculator reports which case applies but does not remove the MIP from the payment partway through, so a life-of-loan payment is shown level for the full term.
Property tax is an annual percent of the home price, homeowners insurance is the annual premium you enter, and HOA dues are a monthly amount. Each is converted to a level monthly figure and held constant, with no escalation for inflation or reassessment. Each figure is rounded to the nearest cent.
MIP rates are set by HUD and change by mortgagee letter, so verify the current figures for your case number date. Not modeled: FHA loan limits by county, closing costs and lender fees beyond the upfront MIP, the annual decline in MIP as the balance falls, refinancing out of FHA to drop the insurance, and the tax deductibility of interest or MIP.
This is an estimate for educational purposes only, not financial, legal, or tax advice, and not a loan offer. Your lender's figures and the current HUD MIP schedule will govern. Consult a qualified professional and an FHA-approved lender for numbers specific to your situation.

Key terms

Definitions for the terms this calculator uses, in our finance glossary .

How an FHA loan payment is calculated

An FHA loan payment is a normal amortizing mortgage payment plus two mortgage-insurance premiums that the Federal Housing Administration requires. This calculator builds the payment the same way the mortgage calculator does, then adds the upfront and annual MIP using HUD’s current rates.

Base loan and the 3.5 percent minimum

FHA requires a down payment of at least 3.5 percent of the price, a maximum loan-to-value of 96.5 percent. The base loan is the price minus your down payment; if you enter less than 3.5 percent, this calculator raises the down payment to the minimum.

base loan = home price - down payment (at least 3.5% of the price)

Upfront MIP (UFMIP)

Every FHA loan carries an upfront mortgage insurance premium of 1.75 percent of the base loan. It is usually financed, meaning it is added to the loan, so it is paid off over the term rather than in cash at closing:

upfront MIP = base loan x 1.75%

amortized principal = base loan + financed upfront MIP

The principal and interest are then the standard amortization of that principal (the same shared payment formula the mortgage calculator uses). If you choose to pay the upfront MIP at closing instead, the amortized principal is just the base loan.

Annual MIP (the monthly piece)

FHA also charges an annual mortgage insurance premium, collected monthly:

monthly MIP = base loan x annual MIP rate / 12

The annual MIP rate depends on the term, the base loan size, and the loan-to-value. For the common case (a term over 15 years, a loan-to-value above 95 percent, and a base loan at or below 726,200 dollars), the rate is 0.55 percent. This calculator applies the rate to the base loan and holds the monthly MIP flat as a level first-year estimate. HUD technically recalculates the annual MIP each year on the average outstanding balance, so the real premium declines slowly over time.

The total, and how long you pay MIP

total monthly payment = principal and interest + monthly MIP + property tax + homeowners insurance + HOA

Duration is the FHA catch. For terms over 15 years, if your loan-to-value at origination is 90 percent or less (a down payment of 10 percent or more), the annual MIP is paid for 11 years. If it is above 90 percent (a down payment under 10 percent), the annual MIP is paid for the life of the loan and does not cancel on its own. This is the key difference from conventional PMI, which a lender must cancel once you reach about 20 to 22 percent equity.

The HUD constants used, with sources

Upfront MIP: 1.75 percent of the base loan. Source: HUD Mortgagee Letter 2013-04 and the Single Family Housing Policy Handbook 4000.1, section II.A.7. Unchanged since 2013.
Annual MIP: 0.55 percent for the common 30-year, low-down case (0.15 to 0.75 percent across the full schedule). Source: HUD Mortgagee Letter 2023-05, a 30-basis-point reduction effective for case numbers assigned on or after March 20, 2023. The schedule splits at a base loan amount of 726,200 dollars and by loan-to-value.
Duration: 11 years at 90 percent loan-to-value or less, life of the loan above 90 percent. Source: HUD Mortgagee Letter 2013-04 and Handbook 4000.1.

MIP rates are set by HUD and change by mortgagee letter. Verify the current figures for your case number date before relying on them; the constants above were verified against HUD sources in July 2026.

Worked example

Using the defaults: a 400,000 dollar home, 3.5 percent down (14,000 dollars), a 6.5 percent rate over 30 years, the upfront MIP financed, a 1.1 percent property tax rate, and 1,800 dollars of insurance.

base loan = 400,000 - 14,000 = 386,000
upfront MIP = 386,000 x 1.75% = 6,755, financed, so amortized principal = 392,755
principal and interest on 392,755 at 6.5% over 30 years = 2,482.48
monthly MIP = 386,000 x 0.55% / 12 = 176.92 (loan-to-value 96.5%, so 0.55%)
property tax = 400,000 x 1.1% / 12 = 366.67; insurance = 1,800 / 12 = 150.00
total monthly payment = 2,482.48 + 176.92 + 366.67 + 150.00 = 3,176.07

Because the down payment is under 10 percent (loan-to-value above 90 percent), the annual MIP here is paid for the life of the loan. Putting 10 percent down instead would drop the annual MIP to 0.50 percent and end it after 11 years.

What this includes and excludes

It includes both MIP premiums, the financed-UFMIP principal, principal and interest, and the monthly escrow. It excludes FHA loan limits by county, closing costs and lender fees beyond the upfront MIP, the slow annual decline in MIP as the balance falls, a future refinance out of FHA to drop the insurance, and the tax treatment of interest or MIP. This is an estimate for education, not a loan offer or financial, legal, or tax advice.

Sources

HUD, Mortgagee Letter 2013-04 (upfront MIP 1.75 percent and MIP duration rules), hud.gov.
HUD, Mortgagee Letter 2023-05 (annual MIP schedule, effective for case numbers assigned on or after March 20, 2023), hud.gov.
HUD, Single Family Housing Policy Handbook 4000.1, section II.A.7 (mortgage insurance premiums), hud.gov.

Frequently asked questions

How is FHA MIP calculated?: There are two premiums. The upfront MIP is 1.75 percent of the base loan, usually financed into the loan. The annual MIP is the base loan times a HUD-set rate (0.55 percent for most 30-year borrowers), divided by 12 and added to each monthly payment. For example, on a 386,000 base loan the upfront MIP is about 6,755 and the monthly MIP is about 177.
What is the FHA down payment?: FHA requires a minimum of 3.5 percent of the purchase price, which corresponds to a 96.5 percent loan-to-value. A larger down payment lowers your loan and can change your MIP: put down 10 percent or more (a loan-to-value of 90 percent or less) and the annual MIP is paid for 11 years instead of the life of the loan.
Does FHA MIP go away?: It depends on your down payment. With less than 10 percent down, the annual MIP lasts the life of the loan and does not cancel on its own. With 10 percent or more down, it ends after 11 years. Unlike conventional PMI, FHA MIP does not automatically drop off when you reach 20 percent equity, so many borrowers refinance into a conventional loan to remove it once they have enough equity.
FHA versus conventional: which mortgage insurance is better?: FHA is often easier to qualify for with a lower credit score and 3.5 percent down, but its MIP usually cannot be cancelled and includes an upfront premium. Conventional loans charge PMI only when you put down less than 20 percent, and that PMI cancels automatically once your equity reaches about 20 to 22 percent. A borrower with strong credit and some equity often pays less over time with a conventional loan, while FHA can be the better entry point with weaker credit.
What does my result mean?: The total monthly payment is what you would pay each month including both premiums, taxes, and insurance. The monthly MIP line shows the annual premium, and the duration note tells you whether it lasts 11 years or the life of the loan based on your down payment. If it is life of loan, factor in that cost or a future refinance when comparing FHA to a conventional loan.

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By Sam Sage Last reviewed July 2026.