An FHA loan on a $120,000 house with the 3.5% minimum down payment ($4,200) costs about $971.07 per month at 6.85%. That includes $54.00 of mortgage insurance, which lasts the life of the loan at this down payment because loan-to-value exceeds 90%.
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About $971.07 per month with 3.5% down at 6.85% — $772.07 principal and interest, $54.00 MIP, plus estimated property tax and insurance.
The FHA minimum is 3.5%, or $4,200, with a credit score of 580 or above. Below 580 the minimum rises to 10% ($12,000).
An up-front premium of $2,027 (1.75% of the loan, financed in) plus $54.00 per month at 0.55% annually. Over the loan that totals roughly $14,883.
Reaching 10% ($12,000) limits mortgage insurance to 11 years instead of the full term, saving roughly $7,383 in MIP. It is the single most valuable threshold in the FHA program.
$117,827 — the $115,800 base loan plus $2,027 of financed up-front MIP. You amortize the larger figure, which is why FHA payments run above a conventional loan at the same price.
Sources: Freddie Mac Primary Mortgage Market Survey; Tax Foundation — Property Taxes by State; Consumer Financial Protection Bureau.
Estimates for educational purposes only — not a loan offer, financial advice, or a commitment to lend. Actual rates, payments, and terms vary by lender and creditworthiness.