Mortgages / FHA Loan Calculator
FHA Mortgage Loan Calculator
An FHA loan is a type of government-backed mortgage insured by the Federal Housing Administration (FHA). FHA loans are a great option for borrowers seeking a mortgage with lower down payment and credit score minimums. Use the calculator below to estimate your FHA mortgage payment, including taxes and insurance.
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How to calculate your FHA mortgage payment
FHA mortgage payments are calculated using your loan amount, interest rate and the number of months in your loan term until your mortgage is considered paid off. Our calculator does the work for you, so you can focus on getting pre-qualified and finding a home you love. When considering your monthly mortgage costs, you’ll want to factor in additional expenses that you may come across like mortgage insurance, property taxes and homeowners insurance.
Home price
The price of the home is the amount you and the seller agree on. Buying a home with a lower purchase price can help reduce your borrowing amount and lower your monthly mortgage payments. Enter your home price into the FHA loan calculator above to begin the estimation process.
Down payment
A down payment is the amount of money you pay upfront toward the purchase of the home. The down payment is subtracted from the home price to calculate the loan amount you plan to borrow. One advantage of an FHA loan is that the down payment minimum can be as low as 3.5% for borrowers with credit scores of 580.
Loan program
For FHA loan programs, you can choose between a 15- and 30-year loan term. The maximum loan term is 30 years. You may be able to pay off the loan sooner by making extra monthly payments.
Interest rate
Like a conventional mortgage, FHA loans are based on current market interest rates. Deciding between a 15-year and a 30-year loan can impact the interest rate on the loan. A shorter loan period typically offers a lower interest rate than a longer term loan.
Mortgage insurance premium
There are two types of mortgage insurance premium (MIP) on FHA loans. The upfront MIP protects the lender from high-risk borrowers, and the annual MIP covers the cost of the insurance program. Both premiums are required when using an FHA loan, and typically last the length of the loan. Your loan amount and down payment impact the cost. Borrowers who make at least a 10% down payment can request removal of MIP after 11 years.
Home insurance
Home insurance, also known as homeowners insurance, protects your liability as the property owner and insures against hazard, loss, etc. Lenders will require homeowners insurance to close on a FHA loan. The annual premium is divided by 12 and applied to each monthly mortgage payment.
Property tax
When purchasing a home, you will be liable for paying the property taxes on it. The amount that you owe will be based on the assessed value of the property and the land that it resides on. Your lender will typically collect property taxes each month with your mortgage payment and put them in your escrow account to pay on your behalf when due.
HOA dues
Homeowners associations charge a monthly HOA fee to cover things, such as electrical, water, garbage and exterior maintenance. Specifics of what are covered vary depending on the association and their bylaws. It is important to know what is and isn't covered when entering an HOA.
FHA loan requirements
- A minimum down payment of 3.5% to 10%
- A minimum credit score of 500 to 580
- An upfront and annual mortgage insurance premium (MIP)
- Proof of steady employment
- A property that meets FHA approval requirements (must be primary residence and approved if a condo)
- A debt-to-income (DTI) ratio of at least 43% (a higher credit score may allow for a DTI as high as 55%)
- A loan-to-value (LTV) ratio of at least 95% or less
- A loan amount within the FHA conforming loan limits
FHA loan benefits
FHA loans are known for their lower credit score requirements, making them an appealing choice for low-income borrowers and first-time homebuyers. FHA loans also have one of the lowest minimum down payment requirements. While conventional loans offer down payments as low as 3% for first-time homebuyers, they typically require borrowers to have a high credit score. FHA loans offer down payments as low as 3.5% for all qualified homebuyers with credit scores as low as 580, whether you're borrowing for the first time or have used a mortgage before.
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