Bright Side Kit

MONEY GUIDE

How to Calculate an FHA Loan Payment — Step by Step

The example is a $400,000 home with 3.5% down at 6.5% over 30 years with 0.55% annual MIP — down $14,000.00, total loan $392,755.00, P&I $2,482.48, MIP $180.01, total $2,662.49 a month. Calculating an FHA loan payment is six steps, and this guide walks through them.

The formula, in one paragraph

An FHA loan payment is six steps. 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, financed into the loan, so the total loan is the base loan times 1.0175. The monthly principal and interest 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 monthly payment is the two added together. See the formula in the box below.

Step 1: The down payment and the base loan

Start with the home price. The example uses $400,000 with 3.5% down. The down payment is $400,000 times 3.5%, which is $14,000.00. The base loan is $400,000 minus $14,000, which is $386,000.00. The 3.5% minimum is why the MIP runs for the life of the loan here.

Step 2: The upfront MIP and the total loan

The upfront MIP is 1.75% of the base loan: $386,000 times 1.75% is $6,755.00. It is financed into the loan here, which is the standard choice, so the total loan is $386,000 times 1.0175, which is $392,755.00. Paying it in cash instead would need $20,755.00 at closing.

Step 3: The principal and interest

The monthly rate is the annual rate divided by 12. The example uses 6.5% over 30 years, so the monthly rate is 6.5% divided by 12, which is 0.5417% a month, and the term is 360 months. The loan formula on $392,755.00 over 360 months gives $2,482.48 a month of principal and interest. The formula is in the box below.

Step 4: The monthly MIP

The monthly MIP is the total loan times the annual MIP rate divided by 12. The example uses 0.55%, which is the current FHA schedule for 30-year loans above 95% LTV, so $392,755.00 times 0.55% divided by 12 is $180.01 a month. The MIP rate is editable in the calculator: check the current FHA schedule before relying on it.

Step 5: The totals

Add the two monthly charges: $2,482.48 plus $180.01 is $2,662.49 a month. The total interest is the P&I times the months, minus the total loan: $2,482.48 times 360 minus $392,755.00 is $500,937.36. The total MIP is the monthly MIP times the MIP months: $180.01 times 360 is $64,804.58. The total paid is $972,496.93.

Working backwards

The formula also runs backwards. For the total payment to be $2,500.00 a month, the rate would need to be 5.8618%. For the P&I alone to be $2,000.00 a month, the rate would need to be 4.5427%. For the total payment to be $2,000.00 a month, the rate would need to be 3.7548%. At 6.5%, the most house at $2,500.00 a month is $375,588.06, with a $13,145.58 down payment and a $368,785.22 total loan, and at $2,000.00 a month it is $300,470.45. The down payment for a $350,000.00 total loan is 14.0049% ($56,019.66 down). The down payment for a $2,500.00 a month total payment is 9.3894% ($37,557.52 down), just under 10%, so the MIP still runs the full term. The term for a $2,500.00 a month total payment on the $392,755.00 loan is 460.73 months, which is 38.39 years.

The 10% down difference

With 10% down 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 monthly 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, against $64,804.58 over 360 months at 3.5% down. A 10% down payment is the only way MIP ever drops off an FHA loan.

The 15-year nuance

At a 15-year term the P&I is $3,421.32 a month, so the total is $3,601.33 a month. But the total interest is only $223,082.19, against $500,937.36 over 30 years, 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. At a 0% rate the P&I is $1,090.99 a month, principal only, and the total is $1,271.00 with MIP.

What NOT to do

Do not judge by the monthly payment alone: a 15-year term costs $938.84 more a month and saves $277,855.17 of interest. Do not put less than 3.5% down: the calculator will not accept it, because the FHA minimum is 3.5%. Do not forget the MIP: $180.01 a month is $64,804.58 over 30 years, and it is the price of the 3.5% down payment. Do not use a stale MIP rate: check the current FHA schedule.

Down payment = home price × down payment %; base loan = home price − down payment; 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 rate = annual rate ÷ 12; 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 payment + P&I × months + total MIP

That box is the whole formula.

Worked example: the $400,000 FHA loan

Step 1: $400,000 at 3.5% down = $14,000.00, base loan $386,000.00.
Step 2: upfront MIP $6,755.00, total loan $392,755.00.
Step 3: P&I $2,482.48 a month at 6.5% over 360 months.
Step 4: monthly MIP $180.01 a month at 0.55%.
Step 5: total $2,662.49 a month, interest $500,937.36, MIP $64,804.58.

Answer: $2,662.49 a month — $2,482.48 of principal and interest plus $180.01 of MIP.

Rounding convention: totals are computed from unrounded values, so rounded parts may differ by a cent from their rounded sum.

Cite this guideBright Side Kit. “How to Calculate an FHA Loan Payment — Step by Step.” Method: down = price × down payment %; 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. Example: $400,000 / 3.5% / 6.5% / 30 yr / MIP 0.55% → down $14,000.00, total loan $392,755.00, P&I $2,482.48, MIP $180.01, total $2,662.49/mo, interest $500,937.36, total MIP $64,804.58. Bright Side Kit. "How to Calculate an FHA Loan Payment — Step by Step." https://brightoolbox.com/guides/how-to-calculate-fha-loan-payment/ Accessed October 25, 2026.
Planning estimate, not professional advice: check the rate, the down payment, and the MIP rate with your lender before you rely on them.

Frequently asked questions

How do I calculate an FHA loan payment?

Work out the total loan, then the P&I and the MIP, then add them. On a $400,000 home with 3.5% down the down payment is $14,000.00 and the base loan is $386,000.00. The upfront MIP is $6,755.00, so the total loan is $392,755.00. At 6.5% over 30 years 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.

What is the monthly payment on a $400,000 FHA loan?

$2,662.49 a month. That is $2,482.48 of principal and interest plus $180.01 of monthly MIP, on a $392,755.00 total loan at 6.5% over 30 years with 3.5% down. The total interest is $500,937.36 and the total MIP is $64,804.58 over 360 months.

How much is the upfront MIP on an FHA loan?

1.75% of the base loan. On a $386,000.00 base loan that is $6,755.00, financed into the loan, which makes the total loan $392,755.00. Paying it in cash instead would need $20,755.00 at closing and would leave a $386,000.00 loan.

When does FHA MIP go away?

After 11 years, but only with 10% or more down. With 10% down the MIP runs 132 months and the total MIP is $22,161.15. With 3.5% down it runs all 360 months and the total MIP is $64,804.58. A 10% down payment is the only way MIP ever drops off an FHA loan.

How much house can I afford at $2,500 a month?

$375,588.06 at 6.5% with 3.5% down. That is a $13,145.58 down payment and a $368,785.22 total loan. At $2,000 a month the most house is $300,470.45. At 5.8618% the $400,000 home itself costs exactly $2,500.00 a month.

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