FHA Loan Calculator

How to Calculate Your Estimated Monthly FHA Loan Payment

To use our FHA loan payment calculator, enter your home value, down payment, interest rate, loan term and credit score. You can also select whether you want to include property taxes and homeowners insurance in your calculation.

Here’s a closer look at each component of the FHA mortgage calculator:

• Home value: The estimated market value of the home you're interested in buying.
• Down payment: The amount of money you're putting down upfront towards the purchase of your home. FHA home loans only require a down payment of 3.5%, but you can choose to put more money down to lower your monthly payment.
• Interest rate: This is the annual interest rate on your loan.
• Loan term: The length of time, in years, that you'll be making payments on your loan.
• Credit score: This is a measure of your creditworthiness and is used to determine your interest rate. FHA loans usually require a credit score of 580 or higher.
• Loan type: Select whether you are interested in a purchase loan, or an FHA refinance loan.
• Advanced settings: The advanced settings allow you to include property taxes and homeowners insurance in your calculation. We recommend including them to receive a more accurate estimate.

How to Lower Your Monthly Payment for an FHA Loan

If you calculate your monthly mortgage payment for an FHA loan and it is not as low as you hoped for, there are a few things you can do to lower it:

• Extend the life of the FHA loan: If you hope to live in the home long-term, extending your loan term from 15 years to 30 years can help lower your FHA loan monthly payments. However, the loan will accumulate more interest with a longer term.
• Avoid paying the FHA mortgage insurance premium (MIP) longer than required: If you put at least 10% down on your FHA loan, you only are required to pay MIP for 11 years of your loan.
• Make a larger down payment: Making a higher down payment than what is required is a great way to lower your FHA monthly mortgage payment.
• Comparison shop FHA interest rates: It’s important to compare FHA lenders and have the best chance to secure a low interest rate. Several FHA lenders have different requirements and rates, so make sure to do your research.

What is Included in an FHA Loan Payment?

Often first-time homebuyers are unaware of all the costs that come with homeownership. Here’s a breakdown of all the factors that affect your monthly mortgage payment with an FHA loan:

• Principal: The amount you owe on your loan excluding your down payment. For example, if you purchase a $240,000 house and put down 10%, your principal would be $216,000.
• Interest rate: The annual rate your lender charges for borrowing the FHA loan. For example if your loan amount is $240,000, and your interest rate is 5.5%, you would pay $13,200 in interest for the first year (0.055 x 240,000 = 13,200). It’s important to note this rate varies from lender to lender.
• Property tax: The area the home is located in will most likely charge a certain amount per year in taxes. These can be federal, local, state or municipal. It is split into 12 installments and collected each month with your mortgage payment.
• FHA mortgage insurance premiums: FHA loans require mortgage insurance. This cost is built into your FHA loan. An upfront premium payment is due at closing, however, ongoing premiums are factored into your monthly payments.
• Homeowners association (HOA) fees: If you are buying a home administered by a homeowners organization, there is a monthly or annual fee for improvements in the neighborhood.

How Much of an FHA Mortgage Payment Can I Afford?

If you're considering an FHA loan, one of the first questions you'll want to answer is: how much can I afford? Your debt-to-income ratio will play a large factor in how much of a home you can comfortably handle. For an FHA loan, this ratio can be as high as 43%. However, there are compensating factors that can affect this limit, such as large cash reserves, increased mortgage payments or residual income.

Our FHA loan calculator can help you decide if the home you want fits into your budget and if an FHA loan is right for you. Reach out to a Paddio specialist today for more information.