How this calculator works
For a standard FHA purchase estimate, upfront MIP is 1.75% of the base loan and may be financed or paid in cash. Enter the annual MIP quoted for your term, balance and LTV; 0.55% is an illustration, not a universal rate. Annual premiums use the average scheduled opening balance for each amortization year, excluding financed upfront MIP. Coverage is modelled for eleven years with at least 10% down and otherwise for the loan term. This estimate keeps full precision; HUD cent-rounding and servicer calculations may differ.
Formula
Base loan = price × (1 - down payment share). Upfront MIP = 0.0175 × base loan. Monthly P&I = P × i / (1 - (1 + i)^(-n)), i = annual rate / 12. Monthly MIP estimate = average scheduled annual base balance × quoted annual MIP rate / 12.
Worked example
For a US$100,000 base loan financed with US$1,750 upfront MIP at 0% over 120 months, P&I is US$847.92. Average base balance in year one is US$95,416.67. At 0.55% annual MIP, estimated monthly MIP is US$43.73, for a first-year total near US$891.65.
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Frequently asked questions
Does 3.5% down establish FHA eligibility?
No. Credit, income, county limits, property standards and programme conditions still apply. Obtain a lender assessment.
Does MIP use the original balance forever?
The estimate recalculates premiums from the annual average scheduled balance. Coverage duration and actual cents are governed by FHA and the servicer.
Are property taxes and home insurance included?
No. Add those costs and any HOA fee to the reported payment when budgeting.