FHA loans include both an upfront premium fee, which can be rolled into the mortgage, and a monthly charge, which is added to your mortgage payment and goes directly to the FHA. The upfront fee is 1.75% of the loan amount. The monthly fee is based on the value of the home. To estimate the costs, plug the numbers in an FHA Loan Calculator. For example, it will show that a 30-year FHA loan at an interest rate of 3.955% on a home valued at $250,000 will have a $1,166 monthly loan payment plus a $174 monthly mortgage insurance payment. Most lenders require that borrowers have mortgage insurance if they're putting less than 20% down on the loan. Once the borrower pays off enough of the loan to reach 20% ownership the insurance can be dropped.