Includes Principal, Interest, MIP, Taxes, and Insurance (PITI)
Understanding FHA Loans and Your Mortgage Payment
FHA loans, insured by the Federal Housing Administration, are a popular option for homebuyers with lower credit scores or limited funds for a down payment. They make homeownership more accessible by reducing some of the traditional lending hurdles. However, understanding the components of an FHA loan mortgage payment is crucial for budgeting.
The monthly payment for an FHA loan, often referred to as PITI, is comprised of several parts:
Principal and Interest (P&I): This is the core of your mortgage payment, covering the repayment of the loan amount borrowed and the interest charged by the lender over the loan's term.
Upfront Mortgage Insurance Premium (UFMIP): FHA loans require an upfront MIP, which is typically financed into the loan amount. This premium protects the lender in case of default.
Annual Mortgage Insurance Premium (MIP): Beyond the upfront fee, FHA loans also have an annual MIP, paid in monthly installments. This premium's duration can vary based on the loan-to-value ratio and loan term.
Property Taxes: These are local government taxes assessed on the value of your home. They are collected by your lender and paid to the taxing authority on your behalf, usually twice a year.
Homeowners Insurance: This covers potential damage to your home from events like fire, theft, or natural disasters. Lenders require homeowners insurance to protect their investment.
How the FHA Mortgage Payment is Calculated
Our calculator estimates your total monthly PITI payment by first calculating the individual components:
Down Payment: The amount paid upfront is determined by your percentage of the home's purchase price.
Loan Amount: This is the Home Purchase Price minus your Down Payment.
Upfront MIP: The Upfront MIP is calculated as a percentage of the initial loan amount and added to the loan balance. So, the actual loan amount financed will be Loan Amount + (Loan Amount * Upfront MIP Percentage).
Monthly Principal & Interest (P&I): This is calculated using the standard mortgage payment formula:
$M = P \frac{i(1+i)^n}{(1+i)^n – 1}$
Where:
$M$ = Monthly Payment (P&I)
$P$ = Principal Loan Amount (including financed UFMIP)
$n$ = Total Number of Payments (Loan Term in Years * 12)
Monthly MIP: This is calculated as (Loan Amount * Annual MIP Percentage) / 12.
Monthly Property Tax: This is calculated as (Home Purchase Price * Annual Property Tax Percentage) / 12.
Monthly Homeowners Insurance: This is simply the Annual Homeowners Insurance divided by 12.
The total estimated monthly payment (PITI) is the sum of the Monthly Principal & Interest, Monthly MIP, Monthly Property Tax, and Monthly Homeowners Insurance.
Note: This calculator provides an estimate. Actual loan terms, fees, and insurance costs can vary. It is always recommended to consult with an FHA-approved lender for a precise quote.
function calculateMortgage() {
var homePrice = parseFloat(document.getElementById("homePrice").value);
var downPaymentPercent = parseFloat(document.getElementById("downPaymentPercent").value);
var loanTerm = parseInt(document.getElementById("loanTerm").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var fhaMortgageInsurancePremium = parseFloat(document.getElementById("fhaMortgageInsurancePremium").value);
var annualMortgageInsurancePremium = parseFloat(document.getElementById("annualMortgageInsurancePremium").value);
var annualPropertyTax = parseFloat(document.getElementById("annualPropertyTax").value);
var annualHomeownersInsurance = parseFloat(document.getElementById("annualHomeownersInsurance").value);
// Input validation
if (isNaN(homePrice) || homePrice <= 0) {
alert("Please enter a valid Home Purchase Price.");
return;
}
if (isNaN(downPaymentPercent) || downPaymentPercent 100) {
alert("Please enter a valid Down Payment Percentage (0-100).");
return;
}
if (isNaN(loanTerm) || loanTerm <= 0) {
alert("Please enter a valid Loan Term in Years.");
return;
}
if (isNaN(annualInterestRate) || annualInterestRate <= 0) {
alert("Please enter a valid Annual Interest Rate.");
return;
}
if (isNaN(fhaMortgageInsurancePremium) || fhaMortgageInsurancePremium 10) { // MIP is usually a few percent
alert("Please enter a valid Upfront MIP Percentage (0-10).");
return;
}
if (isNaN(annualMortgageInsurancePremium) || annualMortgageInsurancePremium 5) { // Annual MIP is usually less than 1%
alert("Please enter a valid Annual MIP Percentage (0-5).");
return;
}
if (isNaN(annualPropertyTax) || annualPropertyTax 10) { // Property tax rates vary, but typically 1-3%
alert("Please enter a valid Annual Property Tax Percentage (0-10).");
return;
}
if (isNaN(annualHomeownersInsurance) || annualHomeownersInsurance 0) {
monthlyPrincipalInterest = principalLoanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else {
monthlyPrincipalInterest = principalLoanAmount / numberOfPayments; // Handle 0 interest rate case
}
var monthlyMIP = (principalLoanAmount * (annualMortgageInsurancePremium / 100)) / 12;
var monthlyPropertyTax = (homePrice * (annualPropertyTax / 100)) / 12;
var monthlyHomeownersInsurance = annualHomeownersInsurance / 12;
var totalMonthlyPayment = monthlyPrincipalInterest + monthlyMIP + monthlyPropertyTax + monthlyHomeownersInsurance;
document.getElementById("monthlyPayment").innerText = "$" + totalMonthlyPayment.toFixed(2);
}