Fha Refinance Calculator

Refinancing an FHA loan can be a powerful financial move—if done wisely. Whether you’re looking to lower your monthly payments, reduce your interest rate, or simply compare options, our FHA Refinance Calculator helps you make informed decisions quickly and easily. With just a few inputs, this tool estimates your new monthly payment, savings, and FHA Mortgage Insurance Premium (MIP) obligations.

In this guide, we’ll walk you through how to use the tool step by step, demonstrate its practical applications, and answer your most pressing questions about FHA refinancing.

How to Use the FHA Refinance Calculator

Follow these simple steps to evaluate your refinance options:

  1. Enter Current Loan Balance ($):
    Input the remaining balance of your existing FHA loan.
  2. Enter Current Interest Rate (%):
    This is the interest rate you are currently paying on your FHA mortgage.
  3. Enter Current Monthly Payment ($):
    Include your current monthly principal and interest payment (you can exclude taxes and insurance).
  4. Enter New FHA Interest Rate (%):
    Enter the interest rate available for your potential new FHA loan.
  5. Enter Years Remaining on Loan:
    This reflects how many years are left on your current loan term.
  6. Enter FHA MIP Rate (%):
    This is the annual Mortgage Insurance Premium percentage. It typically ranges from 0.45% to 1.05%.
  7. Select New Loan Term (Years):
    Choose between 15, 20, or 30 years depending on your refinance goal.
  8. Click “Calculate”:
    Instantly receive your results, including your new monthly payment, estimated savings, MIP, and whether refinancing makes financial sense.
  9. Click “Reset” if you want to clear the form and start again.

Example: FHA Refinance Calculation in Action

Let’s say you currently owe $200,000 on your FHA loan, with a 4.5% interest rate and a monthly payment of $1,250. You have 25 years left on your loan. A lender offers you a 3.5% interest rate for a new 30-year loan with an FHA MIP rate of 0.85%.

Results:

  • New Monthly Payment (P&I + MIP): ~$1,070
  • Monthly Savings: ~$180
  • Total Savings Over Loan Term: ~$18,000
  • New Monthly MIP: ~$142

These savings could help you free up funds for investments, emergencies, or just ease monthly financial pressure.

Why Use an FHA Refinance Calculator?

1. Save Time and Eliminate Guesswork

Rather than manually crunching numbers, our calculator delivers accurate, instant results based on the most critical inputs.

2. Compare Loan Scenarios

Input multiple interest rates and loan terms to evaluate how different refinance offers affect your long-term finances.

3. Understand the True Cost of MIP

Mortgage Insurance Premiums are often overlooked. This tool gives you clarity on how MIP impacts your monthly obligation.

4. Avoid Unnecessary Refinancing

Sometimes, refinancing may not result in significant savings. Our calculator helps you determine whether it’s worth pursuing.

FHA Refinance Use Cases

  • Rate-and-Term Refinance: Lower your interest rate or extend your term to reduce monthly payments.
  • FHA Streamline Refinance: A simplified process that doesn’t require a home appraisal or income verification in many cases.
  • Switching from ARM to Fixed-Rate: Move from an Adjustable-Rate Mortgage (ARM) to a more predictable fixed-rate FHA loan.
  • Consolidating High-Interest Debt: Lower payments might free up cash to pay off other debts.
  • Pre-Retirement Planning: Reduce monthly expenses before transitioning to a fixed income.

FAQs: FHA Refinance Calculator

1. What is FHA refinancing?

FHA refinancing allows homeowners with FHA loans to replace their existing mortgage with a new one—typically at a lower interest rate or longer term.

2. What is MIP?

MIP stands for Mortgage Insurance Premium. FHA loans require MIP regardless of down payment, and it can impact your monthly payment.

3. Is MIP always required on FHA refinances?

Yes. Whether you’re refinancing with a Streamline or traditional FHA loan, MIP is typically required unless your loan is old enough to be exempt.

4. Can I remove MIP by refinancing?

Only by switching to a conventional loan and meeting the 20% equity requirement can you eliminate MIP.

5. How accurate is the calculator?

It provides a reliable estimate based on the data you input. However, consult with a lender for exact loan terms.

6. Does this calculator include property taxes and homeowners insurance?

No. It calculates principal, interest, and MIP only.

7. What is considered a good MIP rate?

The most common MIP rate is 0.85% annually. Lower rates are available for certain loan types and shorter terms.

8. Can I refinance if I’m underwater on my FHA loan?

Yes, the FHA Streamline Refinance program does not require an appraisal, making it possible to refinance even with negative equity.

9. What credit score is needed to refinance an FHA loan?

Generally, 580 is the minimum, but higher scores may help you qualify for better rates.

10. What loan term should I choose?

It depends on your goals. Shorter terms offer faster payoff and lower total interest; longer terms offer lower monthly payments.

11. How often can I refinance my FHA loan?

There’s no limit, but lenders typically require at least 210 days and six on-time monthly payments since your last refinance.

12. What are closing costs for FHA refinancing?

Expect 2%–6% of the loan amount. You may be able to roll these into your new loan.

13. Will refinancing hurt my credit?

Yes, slightly in the short term due to credit inquiries. But timely payments on your new loan can help improve it over time.

14. Can I refinance an FHA loan into a conventional loan?

Yes, if you meet the credit and equity requirements. This can help eliminate MIP.

15. What is an FHA Streamline Refinance?

A simplified refinance option with less paperwork, often no appraisal, and faster processing for existing FHA borrowers.

16. Do I need income verification for FHA refinancing?

For Streamline refinances, no. Traditional FHA refinances do require proof of income.

17. What’s the break-even point of refinancing?

Divide the total refinancing cost by your monthly savings. That’s how many months it takes to recoup your investment.

18. Is refinancing worth it in 2025?

If current FHA rates are significantly lower than your existing rate and you plan to stay in your home for several years, yes.

19. Does refinancing reset my loan term?

Yes. If you refinance into a 30-year loan, you’re starting over unless you pick a shorter term.

20. Can I refinance with late payments on my record?

You generally need to have made the last six payments on time to qualify for an FHA refinance.

Final Thoughts

The FHA Refinance Calculator is an essential tool for homeowners looking to make informed decisions. Whether you’re considering an FHA Streamline Refinance or a full refinance into a new term and rate, this calculator offers clarity on costs, savings, and MIP implications. Try it today to see if refinancing your FHA loan is the right move for your financial future.