This calculator uses industry-standard amortization formulas to estimate your monthly FHA PITI payment, providing a robust financial projection.
Use this accurate tool to quickly determine the estimated monthly cost of your FHA-insured townhome mortgage, including Principal, Interest, Property Taxes, Home Insurance, and FHA Mortgage Insurance Premium (MIP).
Townhome FHA Mortgage Calculator
Estimated Monthly FHA PITI Payment:
$0.00Please ensure all required fields are filled with valid, positive numbers.
Calculation Breakdown (Monthly)
*Note: The FHA Annual MIP rate is estimated at 0.55% of the loan amount for this calculation.
Townhome FHA Mortgage Calculator Formula
The core P&I calculation uses the standard amortization formula:
P&I Payment (M) = P [ i(1 + i)ⁿ / ((1 + i)ⁿ – 1) ]
Where:
P = Loan Principal (Townhome Price - Down Payment)
i = Monthly Interest Rate (Annual Rate / 12)
n = Total Number of Payments (Loan Term in Years * 12)
The total monthly payment is calculated as:
Total PITI = M + (Annual Taxes / 12) + (Annual Insurance / 12) + (Annual MIP / 12)
Formula Source: Investopedia, Amortization
Variables Explained
- Townhome Price ($): The total purchase price of the townhome.
- Down Payment (%): The percentage of the home price paid upfront. FHA requires a minimum of 3.5%.
- Annual Interest Rate (%): The yearly interest rate charged by the lender.
- Loan Term (Years): The duration over which the loan will be repaid (e.g., 15 or 30 years).
- Annual Property Taxes ($): The yearly taxes charged by the municipality, divided into 12 monthly payments for PITI.
- Annual Home Insurance ($): The yearly cost of insuring the property, divided into 12 monthly payments.
Related Calculators
Explore these other useful financial tools:
- Conventional Loan Payment Estimator
- Mortgage Refinance Savings Calculator
- Monthly Debt-to-Income (DTI) Ratio Calculator
- FHA Streamline Eligibility Checker
What is a Townhome FHA Mortgage Calculator?
A Townhome FHA Mortgage Calculator is a specialized financial tool designed to estimate the total monthly housing expenses for a loan guaranteed by the Federal Housing Administration (FHA) used to purchase a townhome. Unlike conventional loan calculators, this tool specifically accounts for the unique requirements of FHA financing, most notably the Mandatory Mortgage Insurance Premium (MIP).
The calculation provides a crucial figure known as PITI (Principal, Interest, Taxes, and Insurance), with the FHA Annual MIP added to give a comprehensive and realistic estimate of the total amount a borrower will pay each month. This is essential for budget planning and understanding affordability, especially for first-time buyers who often utilize FHA loans due to their lower down payment requirements (as low as 3.5%).
How to Calculate a Townhome FHA Payment (Example)
- Determine Loan Principal (P): Start with the Townhome Price ($300,000) minus the Down Payment (3.5% of $300,000 = $10,500). P = $289,500.
- Calculate Monthly P&I Payment (M): Using the amortization formula with P = $289,500, a 7.0% annual rate (i = 0.005833), and a 360-month term (n), the P&I payment (M) is $1,926.34.
- Calculate Monthly FHA MIP: The Annual MIP is approximately 0.55% of the principal. $289,500 x 0.0055 = $1,592.25 annually. Monthly MIP = $1,592.25 / 12 = $132.69.
- Add Taxes and Insurance: Assume $3,600 annual taxes and $1,200 annual insurance. Monthly T&I = ($3,600 + $1,200) / 12 = $400.00.
- Determine Total PITI: Sum all components: M + Monthly MIP + Monthly T&I. $1,926.34 + $132.69 + $400.00 = $2,459.03.
Frequently Asked Questions (FAQ)
What is PITI? PITI stands for Principal, Interest, Taxes, and Insurance. It represents the four main components of a typical mortgage payment and is the standard metric used by lenders to assess monthly housing costs.
Is the Upfront MIP included in the monthly payment? No, the Upfront MIP (currently 1.75% of the loan amount) is usually financed into the loan principal or paid as cash at closing. The monthly payment calculated here only includes the ongoing Annual MIP component.
Why is the MIP required for an FHA loan? The Mortgage Insurance Premium (MIP) is mandatory for almost all FHA loans. It protects the lender (not the borrower) against losses if the borrower defaults, enabling lenders to offer better terms (like low down payments) to higher-risk borrowers.
Do I still pay property taxes and insurance if I buy a townhome? Yes. Townhomes are treated similarly to single-family homes for taxes and insurance. Your property taxes are assessed by the local government, and home insurance (or hazard insurance) is required by the lender.