On a $250,000 home with 3.5% down ($8,750), the FHA loan amount is $241,250 plus the 1.75% upfront MIP ($4,222) rolled in = $245,472. At 7% for 30 years, P&I is about $1,633/mo, plus annual MIP of ~$112/mo, TN taxes ~$131/mo, and insurance ~$83/mo — all-in roughly $1,959/mo.
FHA Loan Payment Calculator
FHA MIP rates for 2026 with base loan amount ≤$726,200 and LTV >90%: 0.55%/yr for 30-yr term. Upfront MIP: 1.75%. TN property taxes at 0.63%/yr. Not a commitment to lend.
What is MIP — and why does it matter?
MIP stands for Mortgage Insurance Premium. It's FHA's version of mortgage insurance — a cost built in to protect the lender if you stop making payments. Unlike conventional loans where mortgage insurance (PMI) can be removed once you reach 20% equity, FHA MIP works differently and is more expensive.
There are two parts to FHA MIP:
Upfront MIP (UFMIP) — 1.75% of the base loan amount, charged at closing. Most buyers roll it into the loan rather than paying it out of pocket, which is what this calculator does. On a $250,000 purchase with 3.5% down, that's about $4,222 added to your loan balance.
Annual MIP — 0.55%/yr (for most 30-year loans in 2026), charged monthly. On that same $250,000 purchase, that's roughly $112/month added to your payment — every month, for the life of the loan if you put less than 10% down.
That last part is the key: FHA annual MIP doesn't automatically go away. If you put 3.5% down (the FHA minimum), MIP stays for the full 30 years unless you refinance into a conventional loan once you have enough equity. This is the main reason VA-eligible buyers are almost always better off with a VA loan — no MIP at all.
FHA vs. VA vs. USDA in the Tri-Cities
FHA is the most flexible program for credit scores — minimum 580 for 3.5% down — but the mortgage insurance (MIP) is the expensive part. Unlike conventional PMI, FHA annual MIP doesn't automatically fall off once you hit 20% equity if you put less than 10% down. It stays for the life of the loan. For VA-eligible buyers, the VA loan is almost always cheaper — zero PMI and often a lower rate. For rural buyers, USDA has a small annual fee but no monthly MIP in the traditional sense. FHA is strongest for buyers who don't qualify for VA or USDA and have a 580–639 credit score.