Calculator

FHA mortgage insurance, in full

What does FHA mortgage insurance really cost over the loan?

This page exists because the calculator that used to sit here got it wrong. It cancelled FHA mortgage insurance at 80% loan-to-value — the conventional rule — and understated the cost by a five-figure sum on an ordinary purchase. Here is the arithmetic done against the rule HUD actually publishes, with the wrong answer drawn alongside it.

The purchase

3.5% is the FHA minimum at 580+ credit. Above 10% the duration rule changes.

Mortgage insurance over the loan—Up-front premium plus every annual premium
Up-front MIP (1.75%)—
Annual MIP rate—
First monthly premium—

How long it runs

—

— — decided by the loan-to-value at origination (—), not by how much equity you later build.

The answer a broken calculator gives

Apply the conventional 80%-LTV cancellation rule to this FHA loan — which is what the shared template that used to run this site did — and the total annual MIP comes out at— instead of—.

Understated by —

The balance crosses 80% of the purchase price — in. Under FHA rules nothing happens on that date.

Cumulative MIP: the real rule against the conventional one

The loan itself

Base loan amount—
Financed after up-front MIP—
Principal & interest—
Total monthly—

What this page assumes, and where it comes from

Every field starts from a placeholder you can change. The interest rate is a round starting number, not a quote, not an average, and not tied to a date — this site publishes no rates. The tax, insurance and mortgage-insurance rates are typical orders of magnitude, not your county’s or your insurer’s.
FHA annual MIP is charged on the average outstanding balance for each year, at the rates in HUD Mortgagee Letter 2023-05 — where the RATE breaks at 95% loan-to-value, not at 90%, which is where the DURATION breaks. It runs for the LIFE OF THE LOAN when the loan-to-value at origination is above 90%, and for 11 years otherwise (HUD ML 2013-04). It does not stop at 80% — that is the conventional rule, and applying it to an FHA loan understates the cost by a five-figure sum on an ordinary 3.5%-down purchase.
Up-front MIP is 1.75% of the base loan amount and is assumed financed into the loan, which is what almost every FHA borrower does.
The schedule is a level-payment amortisation: interest is the balance times the monthly rate, and everything else reduces principal. Extra payments are applied to principal in the month you set.
Every figure this calculator produces is an illustration. It uses the published rules for amortisation and mortgage insurance, and states its assumptions on the page, but it cannot know your credit profile, your county’s tax assessment or an insurer’s pricing. Treat the shape of the answer as useful and the exact dollar as a placeholder.

Questions this raises

Does FHA mortgage insurance stop at 20% equity?

No. That is the conventional rule and it is the single most common error in mortgage calculators, including the one this site used to run. FHA annual MIP is governed by HUD Mortgagee Letter 2013-04: above 90% loan-to-value at origination it runs for the life of the loan, and at 90% or below it runs for eleven years. Nothing about reaching 80% equity changes it.

So how do people get rid of it?

By refinancing out of the FHA loan into a conventional one once they have enough equity to avoid PMI, or by selling. That refinance has its own costs, which is what the refinance calculator is for.

What is the up-front premium?

1.75% of the base loan amount, charged at closing. Almost every borrower finances it into the loan rather than paying it in cash, which is what this page assumes — so you also pay interest on it for the life of the loan.

Is FHA still worth it?

Often yes, especially with a lower credit score or a thin down payment, because the rate and the qualifying rules can be better than the conventional alternative. The point of this page is not that FHA is bad; it is that the insurance cost should be in the comparison at its real size.

Ask a person about this

A real lender would want these five things before it could say anything useful.

This form is a demonstration. Submitting it validates your entries and shows you the confirmation state. Nothing is saved, nothing is sent, and nobody will call you. See the README for the single seam where real delivery would be wired in.

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