FHA / VA Loan

Calculating FHA and VA Loan Payments

FHA and VA loans each carry their own government-backed insurance fee structure — entirely different from a conventional loan’s PMI. Select your loan program, enter the loan amount, rate, and term, and this calculator estimates your full monthly payment including that program’s specific upfront and ongoing costs.

FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), typically financed directly into the loan, plus an ongoing Annual Mortgage Insurance Premium (MIP) charged monthly — unlike conventional PMI, FHA MIP generally can’t be cancelled once you build enough equity.

VA loans charge no monthly mortgage insurance at all — one of the VA loan program’s headline benefits. Instead, a one-time VA Funding Fee (also typically financed into the loan) covers the program’s cost.

The Formula

$$\vD{\text{Upfront Fee}} = \vA{\text{Loan Amount}} \times \vB{\text{Upfront Fee Rate}}$$ $$\vE{\text{Financed Loan Amount}} = \vA{\text{Loan Amount}} + \vD{\text{Upfront Fee}}$$

From there, principal and interest use the standard fixed-rate amortization formula applied to the financed amount. FHA loans add a monthly MIP charge ($\vE{\text{Financed Loan Amount}} \times \vC{\text{Annual MIP Rate}} \div 12$); VA loans add nothing further.

Worked Example

A $300,000 loan at 6.5% for 30 years:

FHA (1.75% UFMIP, 0.55% annual MIP):

1. Upfront fee: $\vA{300,000} \times \vB{1.75\%} = \vD{\$5,250}$.
2. Financed loan amount: $\vA{300,000} + \vD{5,250} = \vE{\$305,250}$.
3. Principal and interest on the financed amount: ≈ $1,929/month.
4. Monthly MIP: $\vE{305,250} \times \vC{0.55\%} \div 12 \approx \$140/\text{month}$.
5. Total monthly payment: $1,929 + 140 \approx \$2,069/\text{month}$.

VA (2.15% funding fee, no MIP):

1. Upfront fee: $\vA{300,000} \times \vB{2.15\%} = \vD{\$6,450}$.
2. Financed loan amount: $\vA{300,000} + \vD{6,450} = \vE{\$306,450}$.
3. Total monthly payment (principal and interest only, no ongoing mortgage insurance): ≈ $1,937/month.

Key Factors to Consider

• VA funding fee rates vary by down payment amount and whether it’s a first or subsequent use of the benefit. A larger down payment typically lowers the funding fee percentage, and some veterans qualify for a reduced fee on a subsequent VA loan — check the current published VA rate schedule for your specific down payment and usage history.
• Some disabled veterans are exempt from the VA funding fee entirely. Veterans receiving VA disability compensation are commonly exempt from the funding fee altogether — this calculator doesn’t model that exemption, so check your own eligibility with the VA directly.
• FHA loans allow lower credit scores and down payments than most conventional loans, which is the tradeoff behind the MIP. FHA’s more lenient qualifying standards are exactly why it requires both an upfront and ongoing insurance premium — the insurance protects the lender against the higher risk profile the program accepts.
• Both loan types have their own property eligibility requirements beyond just the borrower’s qualifications. FHA and VA loans both apply specific property condition and appraisal standards — a property that doesn’t meet these standards may not qualify for either loan type regardless of the borrower’s own financial qualifications.

Common Mistakes

• Comparing an FHA or VA quote against a conventional loan’s rate alone, without adding in the program’s own fees. As covered above, FHA’s monthly MIP and VA’s funding fee both add real, ongoing or upfront cost on top of the interest rate — a lower headline rate on one program can still work out more expensive once its specific fees are factored in.
• Assuming FHA mortgage insurance always cancels once you reach 20% equity, the way conventional PMI does. As the FAQ above explains, FHA MIP’s cancellation rules depend on the down payment made at closing — for many FHA loans it lasts for the entire loan term regardless of how much equity later builds up.
• Not checking whether a VA funding fee exemption applies before assuming the full fee is owed. As noted above, veterans receiving VA disability compensation are commonly exempt from the funding fee entirely — this calculator can’t determine that eligibility for you, so it’s worth confirming with the VA before budgeting for the full fee.
• Using a single flat VA funding fee rate regardless of down payment size or prior VA loan use. As covered above, the actual published rate schedule varies by both of those factors — a first-time use with no down payment and a subsequent use with 10% down can land on very different fee percentages.

Useful to Know

• FHA and VA loans exist specifically to make homeownership reachable for borrowers who wouldn’t qualify for the best conventional terms — the extra fees modeled here are the tradeoff for that more lenient qualifying bar, not an arbitrary surcharge.
• Refinancing into a conventional loan once you’ve built enough equity is a common way to shed FHA’s ongoing MIP for good, rather than waiting out the cancellation timeline — worth comparing against the Refinance Calculator once your equity position improves.
• This calculator pairs naturally with the Mortgage Calculator (for comparing against a conventional loan’s own PITI breakdown) and the Down Payment Calculator (for seeing how a larger down payment affects both your loan amount and, for VA loans, your funding fee rate).