How FHA loan payments work
An FHA payment carries more than principal and interest. Two mortgage insurance premiums protect the lender, and both are part of your cost.
- Upfront MIP (1.75%) - Added to the loan balance at closing. On a $337,750 base loan that is about $5,910 financed over the term.
- Annual MIP (0.15%-0.75%) - Charged on the base loan and divided by 12 for your monthly payment. The rate depends on term, loan size, and LTV.
- MIP duration - Below 10% down on a 30-year loan, annual MIP lasts the full term. With 10% or more, it drops off after 11 years.
Enter a price and down payment above and the calculator selects the annual rate automatically, then shows how the premium changes the monthly payment and payoff.
FHA vs conventional
- Credit score under 700 - FHA is more forgiving and can approve scores as low as 580, or 500 with 10% down. Conventional loans want 620 and price best above 740.
- Small down payment - FHA's 3.5% minimum beats most conventional options for buyers without large savings, though mortgage insurance applies.
- Higher DTI - FHA allows debt-to-income up to 43%, sometimes higher with compensating factors. Conventional usually caps near 36% to 43%.
- Strong credit and 20% down - Conventional wins because there is no mortgage insurance and the rate is usually lower.
2026 FHA annual MIP rates
For 30-year loans, the annual premium follows the loan size and loan-to-value ratio:
| Loan amount | LTV ratio | Annual MIP |
|---|---|---|
| ≤ $726,200 | ≤ 95% | 0.50% |
| ≤ $726,200 | > 95% | 0.55% |
| > $726,200 | ≤ 95% | 0.70% |
| > $726,200 | > 95% | 0.75% |
Terms of 15 years or less use lower rates, from 0.15% to 0.65%, based on LTV and loan size. The calculator picks the correct tier from your inputs.
Frequently asked questions
FHA vs conventional loan - which is better?
FHA is more forgiving on credit and down payment, which helps buyers with thinner files. Conventional loans price better for strong credit and 20% down because they avoid mortgage insurance. Compare the total monthly cost, not just the rate, before choosing.
What are the 2026 FHA loan limits?
The standard limit for a single-family home is $726,200 in most of the country, with higher ceilings in expensive metro areas. Loan limits affect both eligibility and the annual MIP tier, so confirm the number for your county before you shop.
Why is there both an upfront and an annual MIP?
FHA insures the loan in two ways. The upfront premium equal to 1.75% of the base loan is added to your balance at closing, and the annual premium is spread across your monthly payments. Together they replace the private mortgage insurance a conventional loan would require.
How long do I pay annual MIP?
With less than 10% down on a 30-year loan, annual MIP lasts for the life of the loan. Put 10% or more down and it drops off after 11 years. On 15-year loans, MIP ends once the balance reaches 78% of the original loan amount.
Can I avoid the upfront MIP?
No. The upfront premium is required on virtually every FHA purchase loan and cannot be waived. Some lenders let you pay it in cash at closing instead of financing it, which keeps the loan balance lower but requires more cash upfront.
How much down do I need for an FHA loan?
The minimum is 3.5% with a credit score of 580 or higher. Between 500 and 579, a 10% down payment is typically required. Below 500, most lenders will not approve an FHA loan, and the annual MIP lasts longer with less than 10% down.
Estimates only. FHA loan limits, MIP rates, and eligibility change by county and year. Confirm details with an FHA-approved lender before making an offer.
