FHA Funding Fee & Monthly Mortgage Insurance | MIP Calculator

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This page explains the FHA loan calculation and the FHA monthly mortgage insurance premium (MIP).

As you can see, I have detailed the changes over the last few years. Here's the short version.

Cartoon of confused man STEP 1
Sales Price - Down Payment = FHA Base Mortgage
STEP 2
FHA Base Mortgage X FHA Funding Fee Percentage = FHA Funding Fee Cost
STEP 3
FHA Base Mortgage + FHA Funding Fee Cost = FHA Mortgage

FHA Funding Fee & MIP Calculator

There are maximum FHA loan amounts and the monthly mip will vary based on the term of the mortgage - see below

FHA DOWN PAYMENT CALCULATION
30 YEAR FHA MORTGAGE	Prior to April 5, 2010	As of April 5, 2010	As of October 4, 2010	Effective April 18, 2011
Sales Price	$ 100,000	$ 100,000	$ 100,000	$ 100,000
X Down Payment Percentage	3%	3.5%	3.5%	3.5%
= Down Payment	$ 3,000	$ 3,500	$ 3,500	$ 3,500

After subtracting out the down payment from the sales price, we'll calculate the "base mortgage". The FHA funding fee as known as the upfront mortgage insurance premium (UFMIP) is calculated on the "base mortgage".

FHA BASE MORTGAGE CALCULATION
30 YEAR FHA MORTGAGE	Prior to April 5, 2010	As of April 5, 2010	As of October 4, 2010	Effective April 18, 2011
Sales Price	$ 100,000	$ 100,000	$ 100,000	$ 100,000
Less Minimum Down Payment	$ 3,000	$ 3,500	$ 3,500	$ 3,500
Equals "Base Mortgage"	$ 97,000	$ 96,500	$ 96,500	$ 96,500

Now multiply the base mortgage by the FHA funding fee percentage.

30 YEAR FHA MORTGAGE	Prior to April 5, 2010	As of April 5, 2010	As of October 4, 2010	Effective April 18, 2011
X FHA Funding Fee Percentage	0.0175	0.0225	0.0100	0.0100
Equals Funding Fee	$ 1,697.5	$ 2,171.25	$ 965.00	$ 965.00

You're almost done, now add the base mortgage to the funding fee to arrive at the "full" FHA mortgage amount. You're principal interest payment will be based on the "full" mortgage amount.

FHA MORTGAGE LOAN CALCULATION
30 YEAR FHA MORTGAGE	Prior to April 5, 2010	As of April 5, 2010	As of October 4, 2010	Effective April 18, 2011
Base Mortgage	$ 97,000	$ 96,500	$ 96,500	$ 96,500
PLUS Funding Fee	$1,697.50	$ 2,199.38	$ 965.00	$ 965.00
EQUALS FHA Mortgage	$ 98,697.50	$ 98,671.25	$ 97,465.00	$ 97,465.00
Mortgagee Letter		2010-02	10-28ml.pdf 10-29ml-1.pdf	11-10ml.pdf

One more calculation. You will also have a monthly FHA mortgage premium. Here's the calculation for an FHA loan with the minimum down payment of 3.5% for a 30 year term. Simply multiply the base mortgage by the current mip premium, currently .0115 and divide the result by twelve months for the monthly premium. See below for the FHA mip for down payment of 5% or more for 30 year mortgages and 15 year mortgages.

Monthly FHA MIP Calculation - 30 Years
30 YEAR FHA MORTGAGE	Prior to April 5, 2010	As of April 5, 2010	As of October 4, 2010	Effective April 18, 2011
	Base Mortgage	Base Mortgage	Base Mortgage	Base Mortgage
Sales Price	$ 97,000	$ 96,500	$ 96,500	$ 96,500
X FHA MIP Percentage	x 0050	X.0055	X.0090	X.01150
Annual FHA MIP Premium	= $ 485.00	= $ 530.75	= $ 868.50	= $ 1,109.75
	divided by	divided by	divided by	divided by
	12 months	12 months	12 months	12 months
Monthly MIP Payment	$ 40.42	$ 44.23	$ 72.38	$ 92.48

MAXIMUM FHA MORTGAGE CALCULATION

Hopefully, you have a better understanding of the FHA mortgage and monthly mip calculation, but wait; that's not all. FHA loans have "maximum" loan amounts based on the US county! . . . and the maximum FHA loan limit increases based on the number of living units within the dwelling. You can view the FHA loan limits for your state with the links on the left. You will be redirected to an ancillary web site - but don't forget to bookmark this site.

Here's the calculation:

The following example assumes a sales price of one million dollars. Multiply the sales price by the down payment percentage and subtract out the down payment from the sales price to arrive at the "base loan", however, if the loan amount exceeds the FHA loan limit, replace the base mortgage with the "maximum" FHA loan limit and subtract the limit from the sales price to arrive at the down payment.

Maximum FHA Loan Calculation
	Calculation - 1	Calculation - 2
Sales Price	$ 1,000,000	< One million dollars
Less Down payment Percentage (3.50%)	$ 35,000	Maximum Mortgage Amount
Base Mortgage	(1) $ 965,000	(2) $ 271,050

Subtract the LOWER of calculation 1 or 2 to arrive at the required down payment.

Sales Price	$1,000,000
Less the minimum of (1) or (2) =	$ 271,050
Equals down payment	$728,950

The monthly mip decreases with down payments greater than (and equal to) 5% for 30 year and 15 year FHA loans.

30 & 15 Year Monthly FHA MIP Calculations with down payment
	30 Years with minimum down payment (i.e. 3 1/2%)	30 Years with 5% or more down payment	15 Years with minimum down payment (i.e. 3 1/2%)	15 Years with 5% or more down payment
Base Mortgage	$96,500	$96,500	$96,500	$96,500
Monthly MIP percentage	X .0115	X .0110	X .00500	X .00250
Annual Cost	$1,109.75	$1,061.50	$482.50	$241.25
	Divided by 12 Months	Divided by 12 Months	Divided by 12 Months	Divided by 12 Months
Monthly FHA MIP	$92.48	$88.46	$40.21	$20.10

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The calculators and information contained herein are made available to you as a self-help tool for illustrative use only. Examples are hypothetical. We can not and do not guarantee the applicability or accuracy in regards to your individual circumstances. I encourage you to seek personalized advice from qualified professionals.

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