FHA Loan Calculator (3.5% Down Payment)
Calculate FHA loan payments with just 3.5% down. Understand how mortgage insurance premiums affect your monthly cost on an FHA mortgage.
FHA loans backed by the Federal Housing Administration let buyers enter the market with as little as 3.5% down and more lenient credit requirements (minimum 580 score for 3.5% down). This makes homeownership accessible for first-time buyers, those rebuilding credit, or anyone who hasn't been able to save a traditional 20% down payment. The trade-off is mandatory mortgage insurance -- both an upfront premium and an ongoing annual premium.
Monthly Payment
$1,829.84
Total Interest
$369,241
Total Cost
$658,741
Payment Breakdown
Key Considerations
- With 3.5% down on a $300,000 home, your loan amount is $289,500 -- monthly P&I at 6.5% over 30 years comes to about $1,830, but FHA mortgage insurance adds roughly $160-$190 per month.
- FHA requires an upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount ($5,066 on a $289,500 loan), which is typically rolled into the loan balance.
- Unlike conventional PMI, FHA annual mortgage insurance premiums (MIP) cannot be removed for the life of the loan if you put less than 10% down -- the only way to eliminate it is to refinance into a conventional loan once you reach 20% equity.
- FHA loan limits vary by county: the floor is $498,257 and the ceiling is $1,149,825 in high-cost areas (2024 figures) -- check your county's specific limit before house-hunting.
- Many first-time buyers pair FHA loans with state down payment assistance programs that provide grants or forgivable second mortgages covering part or all of the 3.5% requirement.
Quick Numbers
| Down Payment (3.5%) | $10,500 |
| Base Loan Amount | $289,500 |
| Monthly P&I (6.5%) | $1,830 |
| Monthly MIP (0.55%) | $133 |
| Total Monthly Payment | $1,963 |
| Upfront MIP (1.75%) | $5,066 |
How This Compares
FHA lets you buy a $300,000 home with $10,500 down instead of the $60,000 required for conventional 20% down, saving $49,500 in upfront cash. However, the total monthly cost of $1,963 (including MIP) exceeds the conventional $1,517 P&I by $446 per month. Over 30 years, FHA mortgage insurance adds roughly $47,880 in MIP premiums plus $5,066 upfront, largely offsetting the lower down payment advantage.
Frequently Asked Questions
- What are the FHA loan limits for a $300,000 purchase?
- The 2024 FHA floor limit is $498,257 in most U.S. counties, so a $300,000 purchase falls well within eligibility in standard markets. High-cost counties have ceilings up to $1,149,825 in areas like San Francisco, New York, and Honolulu. Check the FHA mortgage limits page for your specific county before making an offer, as limits are updated annually.
- Can FHA mortgage insurance (MIP) ever be removed?
- If you put down less than 10%, FHA MIP remains for the entire 30-year loan term with no option to cancel based on equity. Putting down 10% or more allows MIP cancellation after 11 years. The most common exit strategy is refinancing into a conventional loan once you reach 20% equity through payments and appreciation, which eliminates MIP entirely.
- What credit score do I need for an FHA loan on a $300,000 home?
- FHA requires a minimum credit score of 580 to qualify for the 3.5% down payment option on a $300,000 purchase. Scores between 500 and 579 require at least 10% down ($30,000). Most FHA lenders impose overlays requiring scores of 620 or higher for the best rates and smoothest underwriting, even though the FHA minimum is lower.
- How does the upfront MIP affect my FHA loan balance?
- FHA charges an upfront mortgage insurance premium of 1.75% of the base loan amount, which is $5,066 on a $289,500 loan. Most borrowers roll this into the loan balance rather than paying it at closing, bringing the total financed amount to $294,566. Rolling in the UFMIP increases your monthly P&I by about $32 and adds roughly $6,460 in additional interest over 30 years.
See also:
Related Tools:
Learn More: