USDA Guarantee Fee Calculator

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USDA Guarantee Fee Calculator

The guarantee fee is USDA’s mortgage insurance — and it is cheaper than FHA’s. It has two parts: 1% upfront and 0.35% a year on your balance. This tool shows the fee on any loan size and answers the common question: is financing the upfront fee worth it, or should you pay it in cash?

FY2027 fee schedule (1% upfront, 0.35% annual, 1 Oct 2026 – 30 Sep 2027), checked against USDA Rural Development program terms, November 2026. Last updated 13 November 2026. Estimates only — not a lender, and not affiliated with the U.S. Department of Agriculture.

Calculate the USDA guarantee fee

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Default 7.02% — Optimal Blue USDA 30-year average, 12 Nov 2026.

Upfront fee = loan × 1%  ·  Annual fee each month = balance × 0.35% ÷ 12
Upfront fee (1%)
$0
Annual fee, year 1, monthly (fee financed)
$0
Lifetime annual fees over full term (financed)
$0
Lifetime guarantee cost — upfront + annual (financed)
$0
Finance the feePay fee in cash
Loan amount$0$0
Monthly principal & interest$0$0
Cash due at closing (fee)$0$0
Extra interest from financing—
Year-by-year annual fee — it falls as your balance falls
YearAnnual fee paidAverage monthly feeBalance at year end

The 0.35% annual fee is charged on your remaining balance, so the dollar amount shrinks every year — but it never cancels while the USDA loan is outstanding. Only refinancing into a conventional loan removes it.

Financing costs a little extra interest but keeps cash in your pocket for moving, furniture and reserves — which is why most USDA buyers finance it. See the fee inside a full payment in the main calculator, or stack USDA against FHA in the comparison tool.

How the USDA Guarantee Fee Works

  • Upfront fee — 1% of the loan amount, charged once. It is normally added to the loan (financed), so a $300,000 loan becomes $303,000. Paying it in cash at closing keeps the loan — and the monthly payment — smaller.
  • Annual fee — 0.35% of the outstanding balance, charged monthly. Because it follows the balance, the dollar amount falls every year. On a $303,000 loan at the start it is about $88.38 a month in year one.
  • For the life of the loan. Unlike some FHA insurance, the USDA annual fee never cancels while the USDA loan is outstanding. Refinancing into a conventional loan is the only way to remove it.
  • Cheaper than FHA. FHA charges 1.75% upfront and 0.55% a year — on the same $300,000 loan that is $5,250 upfront and about $137 a month in year one, against USDA’s $3,000 and about $88.
  • Lifetime cost. The totals above add the 1% upfront fee to every year of the annual fee, and the year-by-year table shows the annual fee shrinking as the balance falls — from about $88 a month in year one on a $300,000 loan to only a few dollars a month by year 30. The comparison line under the tables shows the same loan under FHA’s fee schedule.

Sources. USDA Rural Development guarantee fee schedule — FY2027 (1% upfront, 0.35% annual, 1 Oct 2026 – 30 Sep 2027) — and HUD FHA mortgage insurance schedule (1.75% upfront, 0.55% annual; Mortgagee Letter 2023-05), checked November 2026. The default rate is the Optimal Blue USDA 30-year average of 7.02% (12 Nov 2026).

Sources

Official sources for the figures on this page. If a number here ever disagrees with one of these pages, the official source is correct.

Frequently Asked Questions

Is the USDA guarantee fee the same as PMI?

No. USDA loans never carry private mortgage insurance. The guarantee fee — 1% upfront plus 0.35% a year — replaces PMI entirely, and it is usually cheaper than PMI on a conventional loan or FHA’s 0.55% annual mortgage insurance premium.

Can I pay the upfront fee in cash instead of financing it?

Yes. Paying $3,000 in cash on a $300,000 loan keeps the loan smaller and saves interest over the term — the table above shows the difference. Most buyers still finance it, to keep cash free for moving, furniture and reserves.

Does the annual fee go down over time?

Yes, in dollars: the 0.35% annual fee is charged on your remaining balance, so the monthly amount shrinks every year as you pay the loan down. It never cancels while the USDA loan is outstanding — only a refinance into a conventional loan removes it.

More USDA Loan Tools

One topic, six tools — each answering a different question in the USDA loan journey.