Calculate your FHA Mortgage Insurance Premium (MIP) costs.
Total Annual MIP:$0.00
Understanding FHA MIP
The Federal Housing Administration (FHA) requires borrowers to pay Mortgage Insurance Premiums (MIP) on all FHA-insured loans. This insurance protects lenders against potential losses if a borrower defaults on their loan. MIP ensures that FHA-backed mortgages remain accessible to a wider range of borrowers, including those with lower credit scores or smaller down payments.
Types of FHA MIP
There are two main components to FHA MIP:
Upfront MIP (UFMIP): This is a one-time premium paid at closing. It's typically financed into the loan amount. The rate varies based on the loan-to-value (LTV) ratio, generally 1.75% for most borrowers with less than 10% down.
Annual MIP: This premium is paid monthly as part of your mortgage payment. The rate depends on the loan term and the borrower's LTV. For loans originated after June 3, 2013, the annual MIP rates are as follows:
Less than 5 years loan term: 0.75% (if LTV is 90% or less) or 0.85% (if LTV is more than 90%)
5 years or greater loan term: 0.45% (if LTV is 90% or less) or 0.80% (if LTV is more than 90%)
Note: This calculator primarily focuses on the Annual MIP for common scenarios (e.g., 30-year terms with less than 10% down). Upfront MIP is typically a fixed percentage and financed, while the annual MIP is the recurring cost.
How FHA MIP is Calculated
The calculation for Annual MIP involves several steps:
Determine the Loan-to-Value (LTV) Ratio: LTV = (Loan Amount / Appraised Value or Purchase Price, whichever is less). For simplicity in this calculator, we'll use the provided 'FHA Loan Amount' and assume it represents the base for LTV calculations relevant to MIP rates.
Identify the Correct MIP Rate: Based on the LTV and the loan term, the FHA assigns a specific annual MIP rate. For loans with terms of 5 years or more and LTV greater than 90%, the rate is typically 0.80%. For terms of 15 years or more and LTV of 90% or less, the rate is 0.45%. This calculator defaults to the most common scenario for longer-term loans (5+ years) with a significant down payment (less than 10% of value), using a rate of 0.80% for demonstration. For precise rates, consult FHA guidelines.
This FHA MIP calculator helps potential FHA borrowers estimate the recurring annual cost of mortgage insurance. Understanding this cost is crucial for accurately budgeting your monthly mortgage payments and determining overall affordability. While this tool provides an estimate, always consult with your mortgage lender for exact figures based on your specific loan scenario.
Example Calculation:
Let's say you have an FHA loan of $250,000 with a 30-year term and put down 5% (meaning your LTV is 95%).
FHA Loan Amount: $250,000
Loan Term: 30 years (greater than 5 years)
Initial Percentage Down: 5% (implies LTV > 90%)
Applicable Annual MIP Rate: 0.80% (based on FHA guidelines for LTV > 90% and term > 5 years)
Calculation: $250,000 * 0.0080 = $2,000
The estimated total annual MIP would be $2,000.
function calculateMIP() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var loanTermYears = parseInt(document.getElementById("loanTermYears").value);
var initialPercentDown = parseFloat(document.getElementById("initialPercentDown").value);
var mipResultElement = document.getElementById("mipResult");
// Clear previous results and errors
mipResultElement.textContent = "$0.00";
// Input validation
if (isNaN(loanAmount) || loanAmount <= 0) {
alert("Please enter a valid FHA loan amount.");
return;
}
if (isNaN(loanTermYears) || loanTermYears <= 0) {
alert("Please enter a valid loan term in years.");
return;
}
if (isNaN(initialPercentDown) || initialPercentDown 100) {
alert("Please enter a valid percentage for the initial down payment (0-100%).");
return;
}
// Determine the LTV ratio based on the provided down payment percentage.
// FHA loans are often calculated against the Purchase Price or Appraised Value.
// Here we infer LTV from the down payment percentage to select the MIP rate.
// A down payment of 90%.
var isLTVGreaterThan90 = initialPercentDown = 15) { // Includes 30-year terms
if (isLTVGreaterThan90) {
annualMIPRate = 0.0080; // 0.80% for LTV > 90%
} else {
annualMIPRate = 0.0045; // 0.45% for LTV 90%
// Note: FHA MIP structure can be complex for shorter terms < 15 yrs.
// This is a common rate for terms 90%.
} else {
annualMIPRate = 0.0075; // 0.75% for LTV <= 90%
}
}
// Calculate Annual MIP
var totalAnnualMIP = loanAmount * annualMIPRate;
// Format and display the result
mipResultElement.textContent = "$" + totalAnnualMIP.toFixed(2);
}