Upfront MIP
One-time premiumMost FHA loans charge 1.75% of the base loan amount. It may be financed into the mortgage or paid entirely in cash.
Utah FHA mortgage insurance guide
FHA loans generally include an upfront premium and an annual premium paid monthly. Learn what each one costs, how it affects your payment, and how long it may remain.
Your exact premium and duration depend on the loan term, base loan amount, loan-to-value ratio, and current FHA requirements.
Most FHA loans charge 1.75% of the base loan amount. It may be financed into the mortgage or paid entirely in cash.
The annual premium is divided into monthly installments. Its rate and duration vary by loan term, amount, and LTV.
Upfront MIP is charged once. Annual MIP is collected through monthly installments.
Compare mortgage insurance alongside the rate, principal, taxes, insurance, and HOA dues.
The assessment period depends on the original LTV, mortgage term, and applicable FHA rules.
FHA Mortgage Insurance Basics
Most FHA forward mortgages include two separate mortgage-insurance charges: an upfront premium when the mortgage is created and an annual premium that is typically collected in monthly installments. Understanding both gives you a much clearer picture of the true cost of an FHA loan.
For most standard FHA purchase and refinance mortgages, the upfront mortgage insurance premium is 1.75% of the base mortgage amount. Most borrowers choose to finance the premium into the FHA mortgage rather than pay the entire amount in cash at closing.
Financing UFMIP increases the starting FHA mortgage balance and therefore affects the principal-and-interest payment.
FHA also assesses an annual mortgage insurance premium. The applicable rate depends on factors including the mortgage term, original loan-to-value and base loan amount.
A common minimum-down-payment 30-year FHA purchase currently uses a 0.55% annual MIP when the applicable base loan amount is within FHA's lower premium tier, but other FHA loans can use different rates.
This example isolates the upfront FHA mortgage-insurance premium. It does not include the annual MIP, interest, taxes, homeowners insurance or other housing expenses.
$350,000 × 1.75% = $6,125. If the entire upfront premium is financed, it is added to the base FHA mortgage rather than being included in the borrower's down payment.
FHA mortgage insurance is part of the FHA financing structure. It does not insure the buyer's personal property or pay to repair the home after a covered property loss.
Homeowners insurance is a separate policy that can provide property and liability coverage subject to the policy's terms. It remains a separate housing expense from FHA mortgage insurance.
Upfront MIP affects the mortgage balance. Annual MIP affects the monthly housing payment. When comparing FHA with another loan program, both should be included alongside the interest rate, taxes, homeowners insurance, HOA dues and other applicable housing costs.
Mortgage-insurance premiums vary by FHA program and loan structure. Specialized FHA programs and certain qualifying older FHA refinances may use different premium requirements.
Current FHA MIP Rates
FHA does not use one annual mortgage-insurance rate for every loan. The applicable annual MIP depends primarily on the mortgage term, base loan amount and original loan-to-value ratio.
This is the current annual MIP rate for a mortgage term longer than 15 years, a base loan amount of $726,200 or less, and an original LTV above 95%. That includes many FHA purchases using the minimum 3.5% investment.
Because 96.5% is above FHA's 95% MIP breakpoint, the common minimum-down-payment purchase falls into the 55-basis-point row when the other applicable conditions below are met.
FHA publishes annual mortgage-insurance rates in basis points. One hundred basis points equals one percentage point.
This includes most 30-year FHA purchase mortgages.
| Base Loan Amount | Original LTV | Annual MIP | Duration |
|---|---|---|---|
| $726,200 or less | 90% or less | 0.50% / 50 bps | 11 years |
| $726,200 or less | Over 90% through 95% | 0.50% / 50 bps | Mortgage term |
| $726,200 or less Common | Over 95% | 0.55% / 55 bps | Mortgage term |
| Over $726,200 | 90% or less | 0.70% / 70 bps | 11 years |
| Over $726,200 | Over 90% through 95% | 0.70% / 70 bps | Mortgage term |
| Over $726,200 | Over 95% | 0.75% / 75 bps | Mortgage term |
Annual MIP rates are generally lower on FHA mortgages with terms of 15 years or less, although the shorter amortization can produce a higher principal-and-interest payment.
| Base Loan Amount | Original LTV | Annual MIP | Duration |
|---|---|---|---|
| $726,200 or less | 90% or less | 0.15% / 15 bps | 11 years |
| $726,200 or less | Over 90% | 0.40% / 40 bps | Mortgage term |
| Over $726,200 | 78% or less | 0.15% / 15 bps | 11 years |
| Over $726,200 | Over 78% through 90% | 0.40% / 40 bps | 11 years |
| Over $726,200 | Over 90% | 0.65% / 65 bps | Mortgage term |
FHA's mortgage-insurance schedule uses $726,200 as a base-loan breakpoint for determining the annual MIP rate. Separately, FHA loan limits determine the maximum base mortgage available for a property based on its county and number of units. Do not substitute the current county loan limit for the $726,200 threshold shown in this MIP table.
For a typical 30-year FHA purchase using 3.5% down and a base mortgage of $726,200 or less, the relevant annual MIP rate is currently 0.55%. The full chart becomes important when the loan amount is higher, the buyer makes a larger down payment, or a shorter mortgage term is being considered.
Current standard FHA forward-mortgage annual MIP schedule. Specialized FHA programs and certain qualifying refinances of older FHA mortgages may use different premium requirements.
Your FHA Payment
FHA mortgage insurance affects the payment in two different ways. Financing the upfront premium increases the starting mortgage balance, while annual MIP creates a separate monthly mortgage-insurance charge.
On a $350,000 base FHA mortgage, the 1.75% upfront premium is $6,125. If the borrower finances the full premium, the initial FHA mortgage becomes $356,125.
FHA calculates the periodic mortgage-insurance premium using the applicable annual MIP rate and the scheduled outstanding mortgage balance. The resulting premium is collected through monthly installments.
This example shows how financing the upfront premium changes the starting mortgage balance.
A simple planning shortcut is $350,000 × 0.55% ÷ 12, which equals about $160.42 per month. This is useful for understanding the approximate scale of FHA mortgage insurance before receiving an actual loan calculation.
FHA's periodic MIP calculation uses the annual average outstanding mortgage balance derived from the amortization schedule and the applicable annual MIP rate. Because the scheduled mortgage balance declines, the actual premium calculation can differ from the simple planning shortcut shown here.
Mortgage insurance is only one component. A useful FHA payment estimate should include all applicable recurring housing expenses.
Two loans with similar interest rates can have different monthly costs once mortgage insurance and other housing expenses are included. When comparing FHA with conventional financing, use the complete estimated payment, cash to close and expected mortgage-insurance duration rather than relying on rate alone.
The $160 monthly figure is a simplified planning estimate, not a loan quote or exact FHA periodic MIP calculation. Actual MIP depends on the applicable premium rate, amortization schedule, outstanding balance, mortgage term and FHA program.
FHA MIP Duration
For most modern FHA mortgages, the duration of annual mortgage insurance is determined by the original loan-to-value ratio when the mortgage is created—not by how much equity the homeowner builds later.
For FHA mortgages with an original loan-to-value ratio of 90% or less, annual mortgage insurance is generally assessed for 11 years under the current FHA duration rules.
When the original FHA loan-to-value exceeds 90%, annual MIP is generally scheduled for the full mortgage term under the rules that apply to FHA case numbers assigned on or after June 3, 2013.
A standard FHA purchase using maximum 96.5% financing begins above 90% loan-to-value. Under the current duration rules, annual MIP is therefore generally scheduled for the mortgage term.
When an FHA mortgage begins at 90% LTV or less, the annual MIP duration is generally 11 years rather than the full mortgage term. This is one reason the initial down payment can affect more than just the starting loan balance.
Conventional PMI and FHA annual mortgage insurance follow different cancellation rules. For FHA case numbers assigned on or after June 3, 2013, the annual MIP duration is based primarily on the original LTV. If the mortgage started above 90% LTV, simply paying the balance down to 80% or gaining equity through home-price appreciation does not by itself trigger automatic FHA MIP cancellation.
FHA mortgage-insurance rules have changed over time. Mortgages with case numbers assigned before June 3, 2013 may be subject to older MIP cancellation provisions based on factors such as mortgage term, original LTV and scheduled loan balance. Homeowners with an older FHA mortgage should have the original case-assignment date and loan terms reviewed before assuming today's rules apply.
The better question is whether the new mortgage improves your overall financial position. Compare the current interest rate, remaining FHA MIP, new interest rate, closing costs, monthly savings and expected time in the home before deciding whether replacing the FHA mortgage makes sense.
Duration rules shown apply generally to standard FHA forward mortgages with case numbers assigned on or after June 3, 2013. Older FHA mortgages and certain specialized programs may follow different mortgage-insurance rules.
Compare Mortgage Insurance
FHA mortgage insurance and conventional private mortgage insurance both protect the lender against certain losses, but the way they are priced, paid and eventually removed can be very different.
FHA uses a government-established premium structure. Most standard FHA mortgages include a 1.75% upfront premium plus an annual MIP determined primarily by the mortgage term, original LTV and base loan amount.
Conventional mortgage insurance is provided by private mortgage insurers. Pricing can vary based on factors such as credit profile, down payment, loan-to-value, loan characteristics and the type of mortgage-insurance structure selected.
Because conventional PMI pricing can be sensitive to the borrower's credit profile and loan structure, a buyer with less-than-perfect credit should not assume conventional financing will automatically have the lower mortgage-insurance cost. Compare the actual quotes.
A borrower with stronger credit, a larger down payment or favorable conventional mortgage-insurance pricing may find conventional financing produces a lower insurance cost or a more attractive path to eliminating borrower-paid PMI.
For many conventional principal-residence mortgages covered by the Homeowners Protection Act, borrower-paid PMI can potentially end in one of two common ways.
The homeowner may generally request cancellation when the principal balance reaches 80% of the home's original value, provided applicable payment-history, lien and property-value requirements are satisfied.
Borrower-paid PMI generally must terminate automatically when the mortgage is scheduled to reach 78% of original value, provided the borrower is current.
Fannie Mae, Freddie Mac and mortgage servicers may permit borrower-initiated cancellation based on current property value under additional requirements.
Mortgage insurance is only one part of the decision. Compare both programs using the same purchase price and realistic down payment, then review the complete financing structure.
FHA may produce a more attractive structure for one borrower while conventional financing works better for another. The comparison changes with credit, down payment, interest rate, mortgage-insurance pricing and how long you expect to keep the loan. Use actual loan scenarios rather than deciding based solely on the words “MIP” or “PMI.”
Conventional mortgage-insurance products and cancellation rules vary by loan, insurer, investor, occupancy and payment history. The 80% and 78% examples above generally describe borrower-paid PMI on qualifying principal-residence mortgages and should not be applied to every conventional mortgage-insurance structure.
Plan the Complete Cost
Standard FHA mortgage insurance generally cannot simply be waived. The practical strategies are to change the original loan-to-value, mortgage term, amount financed or future loan structure.
The lowest mortgage-insurance percentage does not automatically produce the lowest monthly payment or the strongest homebuying plan. Look at the entire financing structure.
More money down, a shorter loan term or a future refinance can all reduce mortgage-insurance expense—but each strategy changes other parts of the transaction too.
A larger down payment reduces the base FHA mortgage. For a standard FHA mortgage term longer than 15 years and a base loan of $726,200 or less, moving from above 95% LTV to 90% or less currently changes annual MIP from 0.55% to 0.50%.
Reaching 90% LTV usually means bringing substantially more money to closing.
FHA's current MIP schedule generally uses lower annual premium rates for mortgages with terms of 15 years or less than it does for longer-term FHA mortgages with comparable loan characteristics.
A shorter amortization normally produces a higher required principal-and-interest payment.
Upfront MIP is calculated as a percentage of the base mortgage, so borrowing less directly reduces the dollar amount of UFMIP. A smaller mortgage also generally means fewer dollars of periodic MIP as the FHA balance amortizes.
Putting more cash into the home leaves less money available for reserves, repairs and other financial priorities.
If credit, equity and market conditions improve, refinancing the FHA mortgage into conventional financing may eliminate future FHA MIP. That does not mean refinancing is automatically beneficial.
The new mortgage may have a different rate, closing costs, term and conventional PMI requirement.
For a standard FHA mortgage term longer than 15 years with a base loan of $726,200 or less, the current MIP schedule creates important breakpoints at 95% and 90% original LTV.
Annual MIP generally continues for the mortgage term.
The rate drops, but annual MIP generally still lasts for the mortgage term.
The annual rate remains 0.50%, but the duration generally changes to 11 years.
Because standard UFMIP is 1.75% of the FHA base loan amount, reducing the base mortgage reduces the upfront premium as well.
More money down can reduce the loan and mortgage-insurance expense, but homeownership also brings moving costs, furnishings, maintenance, repairs and unexpected expenses. Keeping appropriate funds after closing may be more valuable than forcing the mortgage into a lower MIP tier.
For example, putting more money down may save mortgage insurance but use cash that could otherwise remain in reserves. A 15-year term may dramatically reduce interest and MIP but increase the required monthly payment. A refinance may eliminate FHA MIP but introduce a higher interest rate or new closing costs. The best structure is the one that improves the complete financial picture.
Examples use standard FHA forward-mortgage premium rules. Actual mortgage-insurance cost depends on the FHA program, base loan amount, original LTV, mortgage term and scheduled outstanding balance.
Common FHA MIP Questions
These answers cover some of the most common questions homeowners and buyers have after understanding the basic FHA mortgage-insurance structure.
No. FHA uses Mortgage Insurance Premiums (MIP), while conventional mortgages may use Private Mortgage Insurance (PMI).
Both help protect the lender against certain losses, but pricing, upfront costs and cancellation rules are different. Conventional PMI may have cancellation rights as equity increases, while modern FHA MIP duration is generally based on the original FHA loan-to-value.
No. Making a 20% down payment does not simply eliminate FHA mortgage insurance the way buyers sometimes associate 20% down with conventional PMI.
A standard FHA mortgage generally still includes upfront MIP and annual MIP. However, an original FHA LTV of 90% or less generally limits annual MIP to 11 years under the rules for modern FHA mortgages.
The dollar amount can decline over time. FHA calculates periodic MIP using the applicable annual premium rate and the scheduled average outstanding mortgage balance.
Because the scheduled mortgage balance generally declines as the loan amortizes, the dollar amount of periodic MIP can also decline even when the applicable MIP percentage remains unchanged.
For an FHA mortgage with a case number assigned on or after June 3, 2013, making extra principal payments does not change the original LTV used to determine the required MIP duration.
If the mortgage originally exceeded 90% LTV, simply accelerating principal until the balance reaches 80% or 78% does not create the same cancellation right associated with conventional PMI. FHA mortgage insurance ends when the applicable FHA duration ends or when the FHA mortgage itself is paid off.
Usually not simply because you sell the home, pay off the FHA mortgage or refinance into a conventional loan.
However, when an eligible FHA-insured mortgage is refinanced into another FHA-insured mortgage within the applicable three-year period, HUD may provide a refinance credit for a portion of the prior UFMIP. The available amount declines over time and is applied toward the upfront premium on the new FHA mortgage.
In a qualifying FHA-to-FHA refinance, the available UFMIP refund is generally handled as a credit toward the upfront MIP on the new FHA-insured mortgage, rather than simply being paid to the borrower as refinance proceeds.
The exact credit depends on the timing of the refinance and the applicable HUD refund schedule.
Yes. Most FHA borrowers finance the upfront mortgage insurance premium into the new FHA mortgage instead of paying the entire premium from available cash at closing.
Financing UFMIP reduces the amount needed upfront, but it also increases the starting mortgage balance and therefore affects the principal-and-interest payment.
FHA's published annual MIP schedule is not simply priced higher because one borrower has a lower credit score. The applicable premium rate is primarily determined by factors such as the mortgage term, original LTV and base mortgage amount.
Credit still matters for FHA eligibility, underwriting and the overall interest rate and loan terms available from the lender.
Refinancing pays off the existing FHA mortgage, so the MIP tied to that FHA loan ends. If the new mortgage is conventional and the borrower has sufficient equity and otherwise qualifies, the new loan may not require private mortgage insurance.
But eliminating MIP does not automatically make refinancing a good financial decision. Compare the new rate, payment, closing costs, mortgage term and expected time in the home.
No. A conventional refinance may still require private mortgage insurance if the new loan-to-value or loan structure calls for PMI.
The advantage is that conventional PMI follows different pricing and cancellation rules, so the complete FHA-to-conventional comparison should be based on actual available financing rather than simply assuming the new loan will have no mortgage insurance.
No. FHA mortgage insurance protects the FHA insurance program and lender against certain mortgage losses.
Homeowners insurance is a separate policy covering the property and other insured risks subject to the policy terms. A typical FHA housing payment can therefore include both annual MIP and a separate homeowners-insurance premium.
It can be. Mortgage-insurance duration is only one part of the financing decision. FHA may provide a useful structure depending on the borrower's credit profile, down payment, debt ratios, interest rate and other qualification factors.
The better approach is to compare the actual FHA and conventional scenarios using the same purchase price and realistic available funds, then review the payment, cash to close and expected cost over the period you expect to keep the mortgage.
We can compare the FHA payment, cash to close, mortgage-insurance duration and available conventional alternatives using your actual credit, down payment and purchase scenario.
FHA mortgage-insurance guidance reviewed September 2026. Older FHA mortgages, specialized FHA programs and individual refinance scenarios may follow different premium or cancellation rules.
Put the MIP in Context
FHA mortgage insurance affects both the starting loan balance and monthly housing cost, but it is only one part of the decision. Interest rate, cash to close, credit profile, down payment, mortgage-insurance duration and how long you expect to keep the loan all matter when comparing FHA with conventional financing.
Learn how credit, down payment, gifts and assistance can affect FHA financing.
Cash Needed FHA Cash to CloseUnderstand the down payment, closing costs, prepaids, credits and other funds involved.
Payment FHA Mortgage CalculatorEstimate principal, interest, taxes, homeowners insurance and FHA mortgage insurance.
Eligibility FHA Loan RequirementsReview the broader FHA requirements for credit, income, debts, property and underwriting.
This page is for educational purposes and is not a commitment to lend or a loan estimate. Mortgage-insurance premiums and eligibility depend on the applicable FHA program, loan structure, verified application information and current FHA guidance.
Victor Emmel | NMLS #133605 | Coast2Coast Mortgage, LLC | NMLS #376205 | Equal Housing Lender.