Monthly Payment on a $350,000 House with FHA 3.5% Down
A $350,000 home at FHA's minimum 3.5% down is the classic first-time-buyer scenario — the lowest cash-to-close path available, paired with mortgage insurance that works differently than conventional PMI.
- 3.5% down on $350,000 is a $12,250 down payment, leaving a $337,750 loan.
- Total monthly payment lands around $2,792/mo at a 6.5% rate.
- FHA mortgage insurance (MIP) adds about $141/mo, and often runs for the life of the loan.
- Comfortably affording this payment implies household income around $119,700/year.
The real payment breakdown
This estimate excludes the FHA upfront MIP (1.75% of the loan, typically financed into the balance) — see our full FHA loan requirements guide for the complete breakdown.
Why FHA mortgage insurance is different
Unlike conventional PMI, FHA's annual MIP doesn't automatically disappear at 78% loan-to-value if your down payment was under 10%. In that case, it typically runs for the entire loan term, and the common exit strategy is refinancing into a conventional loan once you've built real equity — usually 20%, or $273,000 in remaining balance on this loan.
What income actually supports this payment
Using the 28% front-end rule, a $2,792/mo payment implies household income around $119,700/year — though FHA's automated underwriting can approve meaningfully higher DTI ratios than conventional loans when compensating factors are present.
What a rate change does to this specific loan
The 15-year alternative, run on these exact numbers
A 15-year term on this $337,750 loan raises principal and interest to about $2,942/mo, but cuts total lifetime interest from $430,782 to $191,840 — a savings of $238,942.
Try it with your own rate and numbers
The calculator below is pre-filled with this exact scenario.
FHA is an access program, and it prices like one
FHA exists to make homeownership reachable for buyers conventional lending would decline — lower credit scores, thinner reserves, higher debt loads. It does that well. The cost of that access shows up in the mortgage insurance structure, which is more expensive over time than the conventional equivalent.
Two premiums apply. An upfront premium is charged at closing and typically financed into the loan, meaning you borrow slightly more than the purchase price minus your down payment. An annual premium is collected monthly for the duration.
The critical detail: at 3.5% down, FHA mortgage insurance generally lasts the life of the loan. It does not fall off at 20% equity the way conventional PMI does. Reaching 20% equity through payments and appreciation does not end the premium — only refinancing into a conventional loan does.
The refinance exit, and why it isn't automatic
The standard plan for FHA buyers is to refinance to conventional once equity reaches 20%, eliminating the premium permanently. It's a sound plan and it frequently works, but it depends on conditions outside your control at the moment you need them.
Refinancing requires qualifying again — credit, income, and debt evaluated fresh. It requires an appraisal supporting the equity claim. And it requires prevailing rates that make the new loan worth its closing costs. A buyer whose income dropped, or who is looking at rates two points above their FHA note rate, may find the exit closed exactly when they wanted to use it.
This doesn't argue against FHA. It argues for treating the refinance as a possibility rather than a certainty when you run the numbers — and for asking whether a conventional loan at 5% down, with PMI that terminates on its own, is available to you. Many buyers who qualify for conventional take FHA anyway because it was presented first.
What FHA asks of the house, not just the buyer
FHA appraisals include minimum property standards that conventional appraisals don't. Peeling paint on a pre-1978 home, missing handrails, an inoperable furnace, or a roof near the end of its life can all trigger required repairs before the loan closes.
In practice this shapes what you can buy. Fixer-uppers and estate sales are harder to close with FHA financing, and sellers in competitive situations sometimes prefer conventional offers for exactly this reason. If the house you want has visible deferred maintenance, the program choice may be decided for you.
How we verify this: figures on this page are computed from standard published formulas and checked against our own calculators. Assumptions are stated inline. Found an error? Let us know — see our editorial approach.