What is the minimum down payment on an FHA loan?

Most FHA loans need a down payment of at least a small share of the home price. Lenders can set stricter requirements, so check with the lender you choose.

Is the upfront mortgage insurance refundable?

In some cases part of it can be refunded if you refinance or sell within a set period. Ask your lender how the refund rules apply to your loan.

Can I remove FHA mortgage insurance?

It depends on the loan. Some loans allow the insurance to end after a set period, and others keep it for the life of the loan. Refinancing into a conventional loan is another option if your equity allows it.

Does the calculator include closing costs?

No. Closing costs, lender fees, and prepaid items are separate from the monthly payment, so add them to your budget when you plan the purchase.

Where can I find the current mortgage insurance rates?

HUD publishes its current mortgage insurance premium schedule and mortgagee letters. Your lender should also show the rates on your loan estimate.

FHA Loan Calculator | Moni Calculator Pro

$$\text{Payment} = (B + U) \times \frac{r}{1 - (1+r)^{-n}} + \frac{m \times B}{12} + \frac{T + I}{12}$$

In plain text

Payment = (B + U) × (r) ÷ (1 - (1+r)^(-n)) + (m × B) ÷ (12) + (T + I) ÷ (12)

What is an FHA loan?

An FHA loan is a mortgage insured by the Federal Housing Administration, which is part of the U.S. Department of Housing and Urban Development. The insurance lets lenders accept smaller down payments and looser credit requirements than many conventional loans. Lenders still set their own terms, so the rate you are offered can differ from one lender to the next.

How do I use it?

Enter the home price and the down payment as a share of the price. Enter the rate and term from your loan estimate, then the upfront and annual mortgage insurance rates from HUD's current schedule. Add the expected property taxes and homeowners insurance for the year. The results show the estimated monthly payment and each part of it.

How does the calculation work?

The base loan is the home price minus the down payment. The upfront mortgage insurance is a share of the base loan, and it is added to the loan. The loan amount is then spread over the term at the rate you enter, using the standard level-payment formula.

The annual mortgage insurance is a share of the base loan, divided by twelve for each month. Property taxes and homeowners insurance are divided by the months in a year. The estimated monthly payment is the sum of these parts.

Why does mortgage insurance matter?

Mortgage insurance protects the lender if you stop paying, and it adds to the cost of the loan. The upfront part is usually paid at closing or rolled into the loan, and the annual part is paid each month. Over the life of the loan, the insurance can add a large amount, so compare it with the cost of a conventional loan.

How long does the insurance last?

For many FHA loans with a smaller down payment, the annual mortgage insurance stays for the life of the loan. With a larger down payment, it may end after a set period. Check your loan documents for the exact rule, because it depends on the year the loan was made and the down payment.

What can the result not tell me?

The calculator does not know the rate you will be offered, the mortgage insurance rates in force on your closing date, or the actual property tax and insurance amounts. It does not include closing costs, lender fees, or any local programmes that help with the down payment.

Treat the result as an estimate. HUD sets the insurance premiums and changes them from time to time, so check the current schedule before you rely on the figures.

When is an FHA loan a good fit?

An FHA loan can suit a buyer with a small down payment or a lower credit score who would struggle to qualify for a conventional loan. Compare it with a conventional loan, because the total cost of mortgage insurance may be higher. Get written loan estimates for both before you decide.

FHA Loan Calculator