FHA Loan Calculator
An FHA loan carries two premiums. On a $350,000 home at 3.5% down, the base loan is $337,750 and the upfront premium of $5,911 is 1.75% of that, not of the price, and it is added to the loan. The annual premium adds $155 a month, so the full cost is $2,327.
This estimate does not include property taxes, homeowners insurance, mortgage insurance or HOA dues. Your actual payment obligation will be greater.
These figures are the arithmetic of the assumptions you entered. BEDRWay is not a lender, does not quote rates, and this is not a loan offer, a pre-qualification or a commitment to lend. A licensed loan officer runs your actual numbers.
On this page
Two premiums, in two different places
An FHA loan carries mortgage insurance twice over, and the two work nothing alike:
upfront premium = base loan × 1.75%
annual premium ÷ 12 = base loan × annual rate ÷ 12
The upfront premium is charged once, at closing, and almost everybody adds it to the loan rather than paying it in cash. That is why what you borrow is larger than the price less the down payment. The annual premium is charged every month, and it is the one that decides whether FHA is the right product for you.
The upfront premium is a percentage of the loan, not of the price
A very widely used calculator computes it off the purchase price. On its own worked example that overstates the premium by several hundred dollars, and it does so on every single loan it prices. The same table labels its annual premium column as a whole percent where it means a tenth of one, and tiers its rates at a breakpoint that is the conforming loan limit from three years earlier sitting under a current heading.
None of that is copied here. The upfront premium above is 1.75% of the base loan, after the down payment comes off.
When the annual premium ends, which is usually never
On most loans opened after June 2013 it runs for the life of the loan. Ten percent down or more shortens it to eleven years, and that is the only way out that does not involve a new loan. Below that, refinancing into a conventional loan once you have enough equity is the exit, and it is worth planning for from the start rather than discovering in year six.
Conventional mortgage insurance behaves completely differently: you can request cancellation at 80% of the original value and the servicer must terminate it at 78%. That difference, compounded over the years you keep the loan, is frequently larger than the rate difference that made FHA attractive.
Why the APR here is above the rate, and still too low
The upfront premium is financed and it is a finance charge, so you repay a larger balance than you effectively received. That is what lifts the APR above the note rate, and it is the whole reason an APR exists as a separate number.
The annual premium is a finance charge as well. Folding it in requires modelling a payment stream that changes when the premium stops, which this page does not do, so a lender quoting you an APR will arrive at a figure above the one shown here. Treat this APR as a floor rather than a quote.
Is FHA cheaper than conventional?
It depends almost entirely on credit. FHA pricing is far less sensitive to a low score, so it frequently wins below the mid 600s and can be the only option available. Above that, a conventional loan with insurance that eventually cancels often costs less over the years you hold it. There is no general answer, only your two quotes side by side.
County loan limits apply and vary widely across the country. A licensed loan officer can tell you the limit where you are buying in about a minute, and this page does not guess at it.
The full monthly cost at three down payments
| Home price | At 3.5% | At 5% | At 10% |
|---|---|---|---|
| $250,000 | $1,662 | $1,636 | $1,550 |
| $300,000 | $1,995 | $1,964 | $1,860 |
| $350,000 | $2,327 | $2,291 | $2,170 |
| $450,000 | $2,992 | $2,945 | $2,790 |
| $550,000 | $3,657 | $3,600 | $3,410 |
This estimate does not include property taxes, homeowners insurance, mortgage insurance or HOA dues. Your actual payment obligation will be greater.
These figures are the arithmetic of the assumptions you entered. BEDRWay is not a lender, does not quote rates, and this is not a loan offer, a pre-qualification or a commitment to lend. A licensed loan officer runs your actual numbers.
Frequently asked questions
Is the upfront premium 1.75% of the price or of the loan?
Of the base loan, always. A widely used calculator computes it off the purchase price, which overstates it on every single loan it prices, and its own worked example is out by several hundred dollars as a result. On this page it is 1.75% of the loan after the down payment.
Does FHA mortgage insurance ever end?
Only if you put at least 10% down, in which case it stops after eleven years. Below that it runs for the life of the loan on most loans opened since June 2013. Refinancing into a conventional loan once you have enough equity is the usual exit, and it is worth planning for rather than discovering.
Why is the APR above the interest rate here?
Because the upfront premium is financed and is a finance charge, so the amount you actually receive is less than the amount you repay. The annual premium is a finance charge too, and folding it in needs a payment stream this page does not model, so a lender quoting you an APR will arrive at a figure above this one.
Is FHA cheaper than a conventional loan?
It depends almost entirely on credit. FHA pricing is far less sensitive to a low score, so it often wins below the mid 600s. Above that, conventional with mortgage insurance that eventually cancels frequently costs less over the years you keep the loan. Run both.
Sources
Last updated: August 25, 2026