How Much is FHA Mortgage Insurance?
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Wednesday, March 29, 2017

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How Much is FHA Mortgage Insurance?

FHA mortgage insurance consists of a financed upfront fee of 1.75% of your loan amount. A monthly premium is calculated based on loan term and down payment.

posted by: Ryan Martinson NMLS# 175574 Write for us

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The most current FHA mortgage insurance premium update can be found here.

FHA Mortgage Insurance Premiums

FHA loans offer a level of leeway in regards to qualifying for a mortgage that conventional loans do not. That level of leeway comes with a price. Lenders are willing to take on the additional risks associated with lower down payments, lower credit scores, and higher debt-to-income ratios because FHA insures the loan. FHA insurance covers the lender's loss if a homeowner defaults.

There are two insurance premiums collected on FHA loans - both are paid by you, the borrower.

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FHA Upfront Mortgage Insurance Premium (FHA UFMIP)

The first premium collected is charged at loan inception. It is 1.75% of the FHA base loan amount. The premium is then added to your base loan amount, resulting in the FHA total loan amount. You do NOT have to pay this out of pocket.

Example

$100,000 purchase price - 3.5% down payment ($3,500) = $96,500 FHA base loan amount

$96,500 FHA base loan amount x 1.75% = $1,689 FHA UFMIP

$96,500 + $1,689 = FHA total loan amount of $98,189

FHA Monthly Mortgage Insurance (MIP or PMI)

The FHA premium that most impacts the borrower is FHA monthly mortgage insurance. The monthly payment to FHA is actually an annual fee paid monthly. It breaks down like this (using the same example as above).

Updated January 26, 2015

FHA base loan amount $96,500 x applicable upfront fee (chart below) 0.85% = $820.25 annually

$820.25 / 12 = $68.35 FHA monthly mortgage insurance

This amount is added to your principal, interest, taxes & insurance payment.

Our FHA mortgage payment calculator does all this for you. Use our FHA Calculator for more examples.

Related Calculators

FHA Annual Mortgage Insurance Rates (paid monthly)
current as of 1/26/15

Loan Terms Greater than 15 Years
Loan Amount LTV Annual Rate
<= $625,500 > 95% 0.85%
<= $625,500 <= 95% 0.80%
> $625,500 > 95% 1.05%
> $625,500 <= 95% 1.00%

Loan Terms 15 Years or Less
Loan Amount LTV Annual Rate
<= $625,500 > 90% 0.70%
<= $625,500 78.01% - 90% 0.45%
> $625,500 > 90% 0.95%
> $625,500 78.01% - 90% 0.70%
> $625,500 <= 78% 0.45%

*Every effort is made to post valid, up to date information. Mortgage guidelines and programs constantly change. Therefore, the content of each post should be viewed and used as a starting point. Please contact us for current guidelines pertaining to this post or for more information.

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Equal Housing Lender

*All calculations on www.WhatsMyPayment.com are for demonstration purposes only.
Every effort is made to maintain accurate calculations for each program listed. Actual numbers may vary.

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