How an FHA loan payment works
An FHA loan has two charges in the monthly payment: principal and interest, and mortgage insurance premium (MIP). The down payment is the home price times the down payment percent, and the FHA minimum is 3.5%. The base loan is the price minus the down payment. The upfront MIP is 1.75% of the base loan, and it is financed into the loan here — the standard choice — so the total loan is the base loan times 1.0175. The monthly principal and interest is the loan formula on the total loan at the annual rate over the term, with the monthly rate the annual rate divided by 12. The monthly MIP is the total loan times the annual MIP rate divided by 12. The total monthly payment is the two added together. The total interest is the P&I times the months, minus the total loan. The total MIP is the monthly MIP times the MIP months: 132 months (11 years) when the down payment is 10% or more, and the full term when it is less.
At the defaults — a $400,000 home, 3.5% down, 6.5% over 30 years, MIP 0.55% — the down payment is $14,000.00, the base loan is $386,000.00, the upfront MIP is $6,755.00, and the total loan is $392,755.00. The P&I is $2,482.48 a month and the monthly MIP is $180.01 a month, so the total is $2,662.49 a month. The total interest is $500,937.36 and the total MIP is $64,804.58 over 360 months, for a total paid of $972,496.93. The 3.5% minimum down is why MIP runs the full 30 years here. Paying the upfront MIP in cash instead would need $20,755.00 at closing.
| Case | Down | Total loan | P&I /mo | MIP /mo | Total /mo | Total interest | Total MIP |
|---|
| Default ($400,000, 3.5% down, 6.5%, 30 yr, MIP 0.55%) | $14,000.00 | $392,755.00 | $2,482.48 | $180.01 | $2,662.49 | $500,937.36 | $64,804.58 (360 mo) |
| Down 10% | $40,000.00 | $366,300.00 | $2,315.27 | $167.89 | $2,483.15 | $467,195.46 | $22,161.15 (132 mo) |
| Down 20% | $80,000.00 | $325,600.00 | $2,058.01 | $149.23 | $2,207.25 | $415,284.85 | $19,698.80 (132 mo) |
| Down 5% | $20,000.00 | $386,650.00 | $2,443.89 | $177.21 | $2,621.11 | $493,150.76 | $63,797.25 (360 mo) |
| Rate 5.5% | $14,000.00 | $392,755.00 | $2,230.02 | $180.01 | $2,410.03 | $410,052.09 | $64,804.58 (360 mo) |
| Rate 7.5% | $14,000.00 | $392,755.00 | $2,746.20 | $180.01 | $2,926.21 | $595,876.98 | $64,804.58 (360 mo) |
| Rate 8% | $14,000.00 | $392,755.00 | $2,881.90 | $180.01 | $3,061.91 | $644,727.94 | $64,804.58 (360 mo) |
| 15-year term | $14,000.00 | $392,755.00 | $3,421.32 | $180.01 | $3,601.33 | $223,082.19 | $32,402.29 (180 mo) |
| Home price $300,000 | $10,500.00 | $294,566.25 | $1,861.86 | $135.01 | $1,996.87 | $375,703.02 | $48,603.43 (360 mo) |
| Home price $550,000 | $19,250.00 | $540,038.13 | $3,413.41 | $247.52 | $3,660.93 | $688,788.86 | $89,106.29 (360 mo) |
| MIP rate 0.50% | $14,000.00 | $392,755.00 | $2,482.48 | $163.65 | $2,646.13 | $500,937.36 | $58,913.25 (360 mo) |
| MIP rate 0% (no MIP) | $14,000.00 | $392,755.00 | $2,482.48 | $0.00 | $2,482.48 | $500,937.36 | $0.00 (360 mo) |
The worked example, line by line
Setup: home price $400,000, down payment 3.5%, rate 6.5%, term 30 years, annual MIP 0.55%.
Line 1 — the down payment and the base loan. $400,000 × 3.5% = $14,000.00 down, so the base loan is $400,000 − $14,000 = $386,000.00.
Line 2 — the upfront MIP and the total loan. $386,000 × 1.75% = $6,755.00 of upfront MIP, financed into the loan, so the total loan is $386,000 × 1.0175 = $392,755.00.
Line 3 — the principal and interest. The monthly rate is 6.5% ÷ 12 = 0.5417% a month, and the loan formula on $392,755 over 360 months gives $2,482.48 a month.
Line 4 — the monthly MIP. $392,755 × 0.55% ÷ 12 = $180.01 a month.
Line 5 — the total monthly payment. $2,482.48 + $180.01 = $2,662.49 a month.
Line 6 — the totals. $2,482.48 × 360 − $392,755 = $500,937.36 of total interest, and $180.01 × 360 = $64,804.58 of total MIP. The total paid is $14,000 + $2,482.48 × 360 + $64,804.58 = $972,496.93. Rounding convention: all figures are computed from unrounded values and rounded only for display — money to cents, rates to two decimals, so a figure worked out from the rounded numbers can differ by a few cents from the figure shown. The exact total MIP is 64804.575 dollars, a half-cent tie, which rounds half-up to $64,804.58.
Reverse: the rate for a $2,500 a month total payment is 5.86% (exact 5.8618); the rate for $2,000 a month of P&I is 4.54% (exact 4.5427); the rate for a $2,000 a month total payment is 3.75% (exact 3.7548); the most house at $2,500 a month is $375,588.06 (down $13,145.58, total loan $368,785.22); at $2,000 a month it is $300,470.45; the down payment for a $350,000 total loan is 14.00% (exact 14.0049, down $56,019.66); the down payment for a $2,500 a month total payment is 9.39% (exact 9.3894, down $37,557.52 — just under 10%, so MIP still runs the full term); and the term for a $2,500 a month total payment on this loan is 460.73 months (38.39 years — a 460-month payment is $2,500.83 and a 461-month payment is $2,499.69).
Every branch, checked
Down 10%: the down payment is $40,000.00 and the total loan is $366,300.00, so the P&I is $2,315.27 and the MIP is $167.89, for a total of $2,483.15 a month. The MIP ends after 11 years, so the total MIP is only $22,161.15 over 132 months, and the total interest is $467,195.46. Ten percent down is the cheapest way to cut the MIP bill by two thirds.
Down 20%: the down payment is $80,000.00 and the total loan is $325,600.00, so the P&I is $2,058.01 and the MIP is $149.23, for a total of $2,207.25 a month. The total MIP is $19,698.80 over 132 months and the total interest is $415,284.85. Twenty percent down still pays MIP for 11 years on an FHA loan — unlike a conventional loan, where 20% down removes mortgage insurance entirely.
Down 5%: the down payment is $20,000.00 and the total loan is $386,650.00, so the P&I is $2,443.89 and the MIP is $177.21, for a total of $2,621.11 a month. The total MIP is $63,797.25 over the full 360 months. A little more down barely moves the payment, because the MIP still runs for life.
Rate 5.5%: the P&I is $2,230.02, so the total is $2,410.03 a month and the total interest is $410,052.09. Rate 7.5%: the P&I is $2,746.20, so the total is $2,926.21 a month and the total interest is $595,876.98. Rate 8%: the P&I is $2,881.90, so the total is $3,061.91 a month and the total interest is $644,727.94. One point of rate is worth about $250 a month here, and about $90,000 of total interest.
15-year term: the P&I is $3,421.32, so the total is $3,601.33 a month — but the total interest is only $223,082.19 and the total MIP is $32,402.29 over 180 months. The shorter term costs more monthly but far less interest, and the MIP stops when the loan ends.
Home price $300,000: the down payment is $10,500.00 and the total loan is $294,566.25, so the P&I is $1,861.86 and the MIP is $135.01, for a total of $1,996.87 a month. Home price $550,000: the down payment is $19,250.00 and the total loan is $540,038.13, so the P&I is $3,413.41 and the MIP is $247.52, for a total of $3,660.93 a month. The payment scales with the price, because every charge is a percent of the loan.
MIP rate 0.50%: the monthly MIP is $163.65, so the total is $2,646.13 a month and the total MIP is $58,913.25. MIP rate 0%: the total is $2,482.48 a month, P&I only, with $0.00 of MIP — the no-MIP comparison, which is what the payment would be without mortgage insurance at all.
Reverse — the other way round: the rate for a $2,500 a month total payment is 5.86%; the rate for $2,000 a month of P&I is 4.54%; the rate for a $2,000 a month total payment is 3.75%; the most house at $2,500 a month is $375,588.06; at $2,000 a month it is $300,470.45; the down payment for a $350,000 total loan is 14.00%; the down payment for a $2,500 a month total payment is 9.39%; and the term for a $2,500 a month total payment is 460.73 months.
What the defaults assume
The model assumes the upfront MIP is financed into the loan, which is the standard choice; paying it in cash instead needs $20,755.00 at closing and leaves a smaller loan. It assumes the annual MIP rate stays at the 0.55% you enter — the current FHA schedule for 30-year loans above 95% LTV — and the rate is editable, so check the current FHA schedule before relying on it. It assumes the rate stays fixed, payments are monthly and on time, and the MIP months follow the FHA rule: 132 months (11 years) at 10% down or more, and the life of the loan below 10% down. It leaves out property tax, homeowners insurance, and HOA dues, which a lender adds on top of this payment. With a 0% rate the P&I is $1,090.99 a month, principal only, and the total is $1,271.00 with MIP. FHA loans also carry no prepayment penalty. Rounding convention: all figures are computed from unrounded values and rounded only for display — money to cents, rates to two decimals, so a figure worked out from the rounded numbers can differ by a few cents from the figure shown.
Output · formula · meaning
| Output | Formula | What it means |
|---|
| Down payment | home price × down payment % | $14,000.00. |
| Base loan | home price − down payment | $386,000.00. |
| Upfront MIP | base loan × 1.75%, financed into the loan | $6,755.00. |
| Total loan | base loan × 1.0175 | $392,755.00. |
| Principal & interest | loan formula on the total loan, rate, term | $2,482.48 a month. |
| Monthly MIP | total loan × annual MIP rate ÷ 12 | $180.01 a month. |
| Total monthly | P&I + monthly MIP | $2,662.49 a month. |
| Total interest | P&I × months − total loan | $500,937.36. |
| Total MIP | monthly MIP × MIP months | $64,804.58 over 360 months. |
| Total paid | down payment + P&I × months + total MIP | $972,496.93. |
| Cash to close if upfront MIP paid in cash | down payment + upfront MIP | $20,755.00. |
| Rate for a $2,500/mo total payment | the rate that makes the total payment $2,500 | 5.86% (exact 5.8618). |
| Rate for $2,000/mo of P&I | the rate that makes the P&I $2,000 a month | 4.54% (exact 4.5427). |
| Rate for a $2,000/mo total payment | the rate that makes the total payment $2,000 | 3.75% (exact 3.7548). |
| Most house at $2,500/mo | the biggest price whose total payment is still $2,500 | $375,588.06 (down $13,145.58, total loan $368,785.22). |
| Most house at $2,000/mo | the biggest price whose total payment is still $2,000 | $300,470.45. |
| Down payment for a $350,000 total loan | 1 − $350,000 ÷ (price × 1.0175) | 14.00% (exact 14.0049, down $56,019.66). |
| Down payment for a $2,500/mo total payment | the down payment that makes the total payment $2,500 | 9.39% (exact 9.3894, down $37,557.52) — just under 10%, so MIP still runs the full term. |
| Term for a $2,500/mo total payment | the term that makes the total payment $2,500 on this loan | 460.73 months (38.39 years). |
| Rate 0% | same model, 0% rate | P&I $1,090.99, MIP $180.01, total $1,271.00 a month (principal only, plus MIP). |
| Down 10% | same model, 10% down | Down $40,000.00, loan $366,300.00, P&I $2,315.27, MIP $167.89, total $2,483.15, interest $467,195.46, total MIP $22,161.15 (132 months). |
| Down 20% | same model, 20% down | Down $80,000.00, loan $325,600.00, P&I $2,058.01, MIP $149.23, total $2,207.25, interest $415,284.85, total MIP $19,698.80 (132 months). |
| Down 5% | same model, 5% down | Down $20,000.00, loan $386,650.00, P&I $2,443.89, MIP $177.21, total $2,621.11, interest $493,150.76, total MIP $63,797.25 (360 months). |
| Rate 5.5% | same model, 5.5% rate | P&I $2,230.02, total $2,410.03, interest $410,052.09. |
| Rate 7.5% | same model, 7.5% rate | P&I $2,746.20, total $2,926.21, interest $595,876.98. |
| Rate 8% | same model, 8% rate | P&I $2,881.90, total $3,061.91, interest $644,727.94. |
| 15-year term | same model, 15-year term | P&I $3,421.32, total $3,601.33, interest $223,082.19, total MIP $32,402.29 (180 months). |
| Home price $300,000 | same model, $300,000 price | Down $10,500.00, loan $294,566.25, P&I $1,861.86, MIP $135.01, total $1,996.87, interest $375,703.02. |
| Home price $550,000 | same model, $550,000 price | Down $19,250.00, loan $540,038.13, P&I $3,413.41, MIP $247.52, total $3,660.93, interest $688,788.86. |
| MIP rate 0.50% | same model, 0.50% MIP | MIP $163.65, total $2,646.13, total MIP $58,913.25. |
| MIP rate 0% | same model, 0% MIP | MIP $0.00, total $2,482.48 (P&I only), total MIP $0.00. |
Who uses this
- The first-time buyer with $14,000 saved: they learn the total payment is $2,662.49 a month — so they know $2,482.48 is principal and interest and $180.01 is MIP, and they check the $20,755.00 it would cost to pay the upfront MIP in cash instead.
- The buyer who can stretch to 10% down: they learn the total is $2,483.15 a month and the MIP ends after 11 years — so they know the total MIP falls from $64,804.58 to $22,161.15, and they check whether the extra $26,000 down is worth the $42,643 of MIP saved.
- The buyer with a $2,500 monthly budget: they learn the most house is $375,588.06 — so they know the $400,000 home costs $162.49 a month too much, and they check the 5.86% rate that would make the $400,000 home fit the budget.
- The buyer weighing a 15-year FHA loan: they learn the total is $3,601.33 a month but the total interest is only $223,082.19 — so they know the short term costs $938.84 more a month and saves $277,855.17 of interest, and they check whether the higher payment fits before choosing the term.
Accuracy & limitations
The math is exact for the numbers you enter: the down payment is the price times the down payment percent, the upfront MIP is 1.75% of the base loan, the total loan is the base loan times 1.0175, the P&I is the loan formula on the total loan, the monthly MIP is the total loan times the annual MIP rate divided by 12, and the total MIP follows the FHA 132-month rule at 10% down or more. What the model cannot do is know your real loan: check the rate, because the rate you are quoted may be for a different term or a different credit tier, and check the MIP rate, because the FHA schedule changes and the 0.55% default is the current schedule for 30-year loans above 95% LTV. It assumes the upfront MIP is financed into the loan; if you pay it in cash, the loan and the payment are both smaller than shown. It leaves out property tax, homeowners insurance, and HOA dues, and it leaves out any seller credit or down payment assistance. For the payment without MIP, see mortgage calculator; for choosing the term, see 15-year vs 30-year mortgage; for FHA against conventional, see FHA vs conventional loan.
Cite this calculatorBright Side Kit. “FHA Loan Calculator: Monthly Payment & MIP Cost 2026” brightoolbox.com, 2026. Method: down = price × down payment %; base loan = price − down; upfront MIP = base loan × 1.75%; total loan = base loan × 1.0175; monthly P&I = total loan × monthly rate ÷ (1 − (1 + monthly rate)−months); monthly MIP = total loan × annual MIP rate ÷ 12; total monthly = P&I + monthly MIP; total interest = P&I × months − total loan; total MIP = monthly MIP × MIP months (132 at 10%+ down, else the full term); total paid = down + P&I × months + total MIP. Defaults: $400,000 / 3.5% / 6.5% / 30 yr / MIP 0.55% → down $14,000.00, base $386,000.00, upfront MIP $6,755.00, total loan $392,755.00, P&I $2,482.48, MIP $180.01, total $2,662.49/mo, total interest $500,937.36, total MIP $64,804.58 (360 mo), total paid $972,496.93, cash to close with upfront MIP in cash $20,755.00. Branches: down 10% → $2,483.15/mo, total MIP $22,161.15 (132 mo); down 20% → $2,207.25/mo, total MIP $19,698.80 (132 mo); down 5% → $2,621.11/mo, total MIP $63,797.25; rate 5.5% → $2,410.03/mo, interest $410,052.09; rate 7.5% → $2,926.21/mo, interest $595,876.98; rate 8% → $3,061.91/mo, interest $644,727.94; 15 yr → $3,601.33/mo, interest $223,082.19, total MIP $32,402.29 (180 mo); price $300,000 → $1,996.87/mo, interest $375,703.02; price $550,000 → $3,660.93/mo, interest $688,788.86; MIP 0.50% → $2,646.13/mo, total MIP $58,913.25; MIP 0% → $2,482.48/mo, MIP $0.00. Reverses: $2,500/mo total → rate 5.86% (exact 5.8618); $2,000/mo P&I → rate 4.54% (exact 4.5427); $2,000/mo total → rate 3.75% (exact 3.7548); $2,500/mo → most house $375,588.06 (down $13,145.58, loan $368,785.22); $2,000/mo → most house $300,470.45; total loan $350,000 → down 14.00% (exact 14.0049, $56,019.66); $2,500/mo total → down 9.39% (exact 9.3894, $37,557.52); $2,500/mo total → term 460.73 months (38.39 yr). Edges: rate 0% → P&I $1,090.99, MIP $180.01, total $1,271.00; down below 3.5% → error (FHA minimum). Bright Side Kit. "FHA Loan Calculator: Monthly Payment & MIP Cost 2026" https://brightoolbox.com/fha-loan-calculator/ Accessed October 25, 2026.
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