- FHA loan
- A mortgage insured by the Federal Housing Administration, part of HUD, and made by approved private lenders. The insurance lets lenders accept smaller down payments and lower credit scores; per this calculator’s assumptions, as little as 3.5% down with a credit score of 580 or higher. Borrowers pay for the insurance through upfront and annual MIP.
- Upfront MIP
- A one-time FHA mortgage insurance premium equal to 1.75% of the base loan amount (HUD, effective 2023). It is usually financed into the loan rather than paid at closing, which is how this calculator treats it. On a $289,500 base loan, it adds $5,066.25 to the balance.
- Annual MIP
- An ongoing FHA mortgage insurance premium, quoted as a yearly percentage of the loan and paid in monthly installments with the mortgage payment. In the common case of a 30-year loan with under 5% down it is 0.55% per year (HUD Mortgagee Letter 2023-05, effective 2023); the rate varies with term, loan size and down payment.
- MIP duration
- How long annual MIP is charged. Per this calculator’s assumptions, putting 10% or more down lets annual MIP end after 11 years; with less than 10% down it generally lasts for the life of the loan, and removing it usually means refinancing into a non-FHA loan. The result shows which case applies to your down payment.
- Down payment
- The part of the purchase price paid in cash at closing rather than borrowed. On an FHA loan it sets the base loan amount and affects how long annual MIP lasts. A larger down payment reduces the loan, the monthly payment and the premiums, which are figured as percentages of the loan.
- Base loan amount
- The home price minus the down payment, before the upfront MIP is added. Both the upfront and annual premiums are figured from this amount. With the default $300,000 price and 3.5% down, the base loan is $289,500. The down payment and closing costs are paid separately in cash.
- Total loan amount
- The base loan plus the financed upfront MIP. It is the balance you actually repay, so principal and interest are calculated on this larger figure. Financing the premium avoids paying it in cash at closing but adds interest on it over the life of the loan.
- Principal and interest
- The part of the monthly payment that repays the loan and covers interest, calculated from the total loan amount, rate and term. On an FHA loan the full monthly payment adds annual MIP on top; property tax and homeowners insurance, which lenders usually also collect, are not included in this calculator.
- FHA loan limits
- The largest loan FHA will insure in a given county. For 2026 the one-unit limit ranges from a floor of $541,288 to a ceiling of $1,249,125 in high-cost areas (HUD, 2026). A loan above the local limit cannot be an FHA loan. This calculator does not check the limit for your county.
