FHA MIP (Mortgage Insurance Premium) is the mortgage insurance required on all FHA loans. It has two parts: an upfront premium of 1.75 percent of the loan amount, usually financed into the loan, and an annual premium of 0.15 to 0.75 percent of the loan balance, paid monthly.

When does FHA MIP go away?

For FHA loans originated after June 3, 2013, MIP cancellation depends on your original LTV. If you put down 10 percent or more (LTV at or below 90 percent), MIP cancels after 11 years. If you put down less than 10 percent, MIP lasts the full loan term and can only be removed by refinancing into a conventional loan.

What is the current FHA MIP rate?

Per HUD Mortgagee Letter 2023-05 effective March 20, 2023, the annual MIP rate for most FHA borrowers (base loan amount up to the standard limit, LTV above 95 percent, term over 15 years) is 0.55 percent of the loan balance annually, down from the previous 0.85 percent.

FHA MIP Calculator

Calculate FHA upfront MIP (1.75%) and annual MIP based on your loan-to-value ratio and term. Current HUD rates per Mortgagee Letter 2023-05.

HUD ML 2023-05 rates Upfront + annual MIP Standard and high-balance

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Your FHA Loan

Home purchase price

Down payment

FHA minimum: 3.5% (credit 580+) or 10% (credit 500-579). LTV: 96.5%

Interest rate

Loan term

Finance upfront MIP into loan?

Your MIP Cost

Monthly MIP

0.55% annual rate

$160

Upfront MIP (1.75%)

$5,906

Loan amount after upfront MIP

$337,750 + $5,906 financed

$343,656

MIP cancellation

11 years

Total MIP paid (until cancellation)

FHA MIP rates (per HUD Mortgagee Letter 2023-05)

FHA MIP has two parts: a one-time upfront premium of 1.75 percent and an annual premium that varies by loan size, LTV, and term. Rates below are effective for loans with case numbers assigned on or after March 20, 2023.

Standard loans (base loan at or below standard limit)

Loan term	LTV	Annual MIP
Over 15 years	95% or less	0.50%
Over 15 years	Above 95%	0.55%
15 years or less	78.01% to 90%	0.15%
15 years or less	Above 90%	0.40%
15 years or less	78% or less	0.00%

High-balance loans (base loan above standard limit)

Loan term	LTV	Annual MIP
Over 15 years	95% or less	0.70%
Over 15 years	Above 95%	0.75%
15 years or less	78.01% to 90%	0.40%
15 years or less	Above 90%	0.65%
15 years or less	78% or less	0.00%

The standard conforming loan limit is set annually by the Federal Housing Finance Agency. For 2024 it is $766,550 for a single-unit home in most counties, with higher limits in high-cost areas. Check the current limit for your county at hud.gov.

Upfront MIP (UFMIP)

FHA charges a one-time upfront MIP of 1.75 percent of the base loan amount at closing. Almost all FHA borrowers finance this amount into the loan rather than paying it in cash. If financed, your actual starting loan balance is 101.75 percent of the amount you borrowed. The calculator shows both scenarios.

When does FHA MIP cancel?

Cancellation rules depend on when your FHA case number was assigned.

FHA loans after June 3, 2013 (most current borrowers)

Cancellation depends on your original LTV at closing.

Down payment of 10 percent or more (original LTV at or below 90%): Annual MIP cancels after 11 years of payments.
Down payment less than 10 percent (original LTV above 90%): Annual MIP lasts the entire loan term. The only way to remove it is to refinance into a conventional loan with less than 80 percent LTV.

FHA loans before June 3, 2013

These older loans follow different rules, generally allowing cancellation at 78 percent LTV based on the original amortization schedule after at least five years. If your loan is this old, contact your servicer for specifics.

FHA MIP vs. conventional PMI

FHA MIP and conventional PMI serve the same purpose (protecting the lender if you default) but work very differently.

Feature	FHA MIP	Conventional PMI
Upfront fee	1.75% (financed)	None (typically)
Annual rate (typical)	0.15% - 0.75%	0.19% - 2.29%
Rate depends on	LTV, term, loan size	Credit score, LTV
Credit score affects rate?	No	Yes (big impact)
Minimum credit score	580 (3.5% down) or 500 (10% down)	Typically 620
Minimum down payment	3.5%	3% (first-time) or 5%
Automatic cancellation	11 years (if 10%+ down) or never	Automatic at 78% LTV
Borrower-request cancellation	Only via refinance	At 80% LTV
Governed by	HUD Mortgagee Letters	Homeowners Protection Act of 1998

Should I take an FHA loan or a conventional loan?

The right choice depends on your credit score, down payment, and plans for the home.

FHA is usually better if...

Your credit score is below 680 (FHA rates do not vary by credit score, while conventional PMI rates skyrocket at lower scores)
You have less than 10 percent down
You have higher debt-to-income ratios (FHA is more flexible)
You plan to refinance within a few years once you build equity

Conventional is usually better if...

Your credit score is 720 or higher (conventional PMI is cheaper at good credit)
You have 10 percent or more down (lower PMI rates kick in, and PMI will cancel at 78 percent)
You plan to stay in the home long-term (MIP for the life of an FHA loan adds up to tens of thousands of dollars)

Frequently asked questions

Can I avoid FHA MIP?

No. All FHA loans require both the upfront and annual MIP. You cannot opt out. The only way to not pay MIP on an FHA loan is to not take an FHA loan.

Is FHA MIP tax deductible?

The federal mortgage insurance premium deduction was last available for tax year 2021 and has not been renewed by Congress. For most borrowers, FHA MIP is not currently deductible on federal returns. Consult a tax professional for your specific situation.

Does FHA MIP go away if I pay down my loan?

For loans after June 3, 2013 with less than 10 percent down, no. Paying down the balance does not cancel MIP. You would need to refinance into a conventional loan.

What is the FHA streamline refinance?

The FHA Streamline is a simplified refinance program for existing FHA borrowers that does not require a new appraisal, credit check, or income verification. It keeps your MIP but can lower your rate. It does not get rid of MIP.