About the USDA Loan Calculator
This USDA loan calculator estimates the monthly payment on a USDA Single Family Housing Guaranteed Loan — the zero-down-payment mortgage for eligible rural and suburban areas. It adds the 1% upfront guarantee fee (usually rolled into the loan), the 0.35% annual fee that works like mortgage insurance, and your property tax and homeowners insurance to give the full monthly housing cost.
It is useful for low- and moderate-income buyers comparing a USDA loan against FHA or conventional options, and for anyone checking a lender’s estimate. USDA guaranteed loans are 30-year fixed-rate mortgages, require the home to be in an eligible area, and cap household income at 115% of the area median, so check eligibility on the USDA site before relying on the numbers.
The annual fee is charged on the average scheduled balance for each year, so it falls slowly as you pay the loan down. The payment shown uses the first year’s fee, which is the highest.
With the default inputs, the total monthly payment is $1,927.94. Change any value above to recalculate instantly.
How to use the usda loan calculator
- 1Enter the home price and any down payment (USDA allows zero).
- 2Enter the interest rate quoted by a USDA-approved lender.
- 3Keep the 1% upfront and 0.35% annual fees unless USDA changes them.
- 4Add yearly property tax and homeowners insurance.
- 5Review the total monthly payment and how the annual fee declines over time.
Formula and method
The base loan is the price minus any down payment. The upfront guarantee fee (currently 1% of the base loan) is normally financed, so the total loan is the base loan plus the fee. Principal and interest are calculated with the standard 30-year fixed amortization formula on the total loan.
The annual fee (currently 0.35%) is charged on the average scheduled unpaid principal balance for each loan year and collected in 12 monthly instalments. Year one is shown as the monthly figure because it is the highest; the table shows how it declines. Monthly property tax and insurance are one-twelfth of the yearly amounts.
- L
- Total loan amount including any financed guarantee fee
- r
- Monthly interest rate (annual rate ÷ 12 ÷ 100)
- n
- Number of payments (360)
- M
- Monthly principal and interest payment
Worked examples
$250k home, 0% down, 6.25%
The 1% fee ($2,500) is added to the $250,000 price for a $252,500 loan, giving $1,554.69 principal and interest at 6.25%. The first-year annual fee is 0.35% of the average balance (about $251,159) ÷ 12 ≈ $73.25, and tax and insurance add $300, for about $1,928 a month.
$320k home, $10k down, 6.75%, fee paid in cash
Paying the $3,100 upfront fee at closing keeps the loan at $310,000, which costs $2,010.65 a month at 6.75%. The year-one annual fee is about $90 a month and tax plus insurance add $425, for roughly $2,526 in total.
Frequently asked questions
What are the USDA loan fees?+
USDA guaranteed loans charge a 1% upfront guarantee fee, which can be financed, and a 0.35% annual fee on the average outstanding balance paid monthly. These replace private mortgage insurance and are lower than FHA mortgage insurance.
Does the USDA annual fee ever go away?+
No. Unlike conventional PMI, the USDA annual fee is charged for the life of the loan. It shrinks slightly each year because it is based on the declining balance, and it ends only if you refinance or pay off the loan.
Who qualifies for a USDA home loan?+
The home must be your primary residence in a USDA-eligible rural or suburban area, and household income must be no more than 115% of the area median. Lenders also look for reliable income and acceptable credit, often a score around 640 or higher.
Is a USDA loan better than an FHA loan?+
If you qualify, USDA is often cheaper: no down payment, a 1% upfront fee versus 1.75% for FHA, and a 0.35% annual fee versus FHA’s typical 0.50%–0.55%. FHA has no location or income limits, though.
Can I roll closing costs into a USDA loan?+
The upfront guarantee fee can be financed, and if the appraisal is higher than the price you may finance some closing costs up to the appraised value. Seller concessions can also cover closing costs.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.