The Federal Housing Administration (FHA) insures loans made by FHA-approved lenders. To protect lenders against potential losses and to keep FHA-insured mortgages accessible to more borrowers, the FHA requires borrowers to pay Mortgage Insurance Premiums (MIP). MIP ensures that even if a borrower defaults on the loan, the lender is likely to recover most of their investment.
FHA MIP is comprised of two parts:
Upfront MIP: A one-time premium paid at closing.
Annual MIP: Paid in monthly installments as part of your regular mortgage payment.
How FHA MIP is Calculated
The calculation of FHA MIP has evolved over time. The current structure, which this calculator aims to estimate, primarily depends on the loan term and the Loan-to-Value (LTV) ratio. The upfront MIP is a fixed percentage, while the annual MIP is a recurring percentage of the loan amount.
Key Factors:
Loan Amount: The total amount borrowed.
Loan Term: The duration of the mortgage (e.g., 15 years, 30 years).
LTV Ratio: The ratio of the loan amount to the appraised value or purchase price of the home, whichever is less. FHA loans typically allow for high LTVs, often starting at 96.5%.
Endorsement Date: The exact MIP rates can depend on when the loan was originated and endorsed by the FHA. This calculator uses current general rates.
MIP Rate Structure (General Guidelines)
FHA MIP rates are set by the Department of Housing and Urban Development (HUD). For loans originated on or after June 3, 2013, the structure is as follows:
Upfront MIP: Typically 1.75% of the base loan amount, regardless of LTV or term.
Annual MIP: This is where the variation occurs, based on loan term and LTV.
For LTVs greater than 95% (most common for FHA):
If the loan term is 15 years or more: The annual MIP is generally 0.55% of the base loan amount.
If the loan term is less than 15 years: The annual MIP is generally 0.45% of the base loan amount.
For LTVs of 90% to 95%:
If the loan term is 15 years or more: The annual MIP is generally 0.50% of the base loan amount.
If the loan term is less than 15 years: The annual MIP is generally 0.40% of the base loan amount.
For LTVs less than 90%:
If the loan term is 15 years or more: The annual MIP is generally 0.45% of the base loan amount.
If the loan term is less than 15 years: The annual MIP is generally 0.40% of the base loan amount.
Important Note: For FHA loans with an original principal loan balance over $625,500 (this limit can vary by county), the MIP rates are typically higher. This calculator uses the standard rates applicable to most FHA loans.
How This Calculator Works
This calculator focuses on estimating the Annual MIP.
You enter the FHA Loan Amount.
You enter the Loan Term in years.
You enter the Loan-to-Value (LTV) Ratio as a percentage.
The calculator then applies the FHA's standard MIP rate structure based on your inputs to provide an estimated annual MIP figure. The monthly MIP is simply the annual MIP divided by 12.
Disclaimer: This calculator is for informational purposes only and does not constitute financial advice. Actual MIP rates may vary. Consult with an FHA-approved lender for precise figures specific to your loan scenario.
function calculateMIP() {
var loanAmountInput = document.getElementById("loanAmount");
var loanTermInput = document.getElementById("loanTerm");
var ltvRatioInput = document.getElementById("ltvRatio");
var resultValueDiv = document.getElementById("result-value");
var resultDescriptionDiv = document.getElementById("result-description");
var loanAmount = parseFloat(loanAmountInput.value);
var loanTerm = parseInt(loanTermInput.value);
var ltvRatio = parseFloat(ltvRatioInput.value);
// Clear previous results and styling
resultValueDiv.innerText = "–";
resultDescriptionDiv.innerText = "";
resultValueDiv.style.color = "#28a745";
// Input validation
if (isNaN(loanAmount) || loanAmount <= 0) {
alert("Please enter a valid FHA Loan Amount.");
return;
}
if (isNaN(loanTerm) || loanTerm <= 0) {
alert("Please enter a valid Loan Term in years.");
return;
}
if (isNaN(ltvRatio) || ltvRatio 100) {
alert("Please enter a valid LTV Ratio between 1 and 100.");
return;
}
var annualMIPRate = 0;
var description = "";
// Determine MIP rate based on LTV and Loan Term
if (ltvRatio > 95) {
if (loanTerm >= 15) {
annualMIPRate = 0.0055; // 0.55%
description = "Based on LTV > 95% and Loan Term >= 15 years.";
} else { // loanTerm 95% and Loan Term = 90 && ltvRatio = 15) {
annualMIPRate = 0.0050; // 0.50%
description = "Based on LTV 90%-95% and Loan Term >= 15 years.";
} else { // loanTerm < 15
annualMIPRate = 0.0040; // 0.40%
description = "Based on LTV 90%-95% and Loan Term < 15 years.";
}
} else { // ltvRatio = 15) {
annualMIPRate = 0.0045; // 0.45%
description = "Based on LTV = 15 years.";
} else { // loanTerm < 15
annualMIPRate = 0.0040; // 0.40%
description = "Based on LTV < 90% and Loan Term < 15 years.";
}
}
var annualMIP = loanAmount * annualMIPRate;
var monthlyMIP = annualMIP / 12;
// Format the result with currency
var formattedAnnualMIP = annualMIP.toLocaleString(undefined, {
style: 'currency',
currency: 'USD'
});
resultValueDiv.innerText = formattedAnnualMIP;
resultDescriptionDiv.innerText = `${description} Estimated Monthly MIP: ${monthlyMIP.toLocaleString(undefined, { style: 'currency', currency: 'USD' })}.`;
}