Insurance

MIP (Mortgage Insurance Premium)

MIP, or mortgage insurance premium, is the insurance you pay on an FHA loan. It typically includes an up-front amount plus a monthly charge. Like PMI on conventional loans, it protects the lender, not you. MIP rules differ from PMI, and on many FHA loans it can last longer.

The big difference between MIP and PMI is the loan type and the rules. MIP comes with FHA loans and usually has two parts: a one-time up-front premium that’s often financed into the loan, and an annual premium split into your monthly payments. PMI, by contrast, shows up on conventional loans and is monthly only in most cases.

MIP can also be harder to shake. On many FHA loans today, the annual premium stays for a long time or the life of the loan unless you refinance into a different program. That’s not always a dealbreaker, but it’s a real cost worth comparing against a conventional option. I can run both so you see the difference.

Related terms

PMI (Private Mortgage Insurance)

PMI, or private mortgage insurance, is a fee that protects the lender, not you, when you put less than 20% down on a conventional loan. It's usually added to your monthly payment. Once you build enough equity, you can often request to have PMI removed, which lowers your payment.

FHA Loan

An FHA loan is a mortgage insured by the Federal Housing Administration. It often allows a lower down payment and more flexible credit guidelines than conventional loans, which helps many first-time and credit-rebuilding buyers. The trade-off is mortgage insurance (MIP), which on many FHA loans can last longer than conventional PMI.

LTV (Loan-to-Value Ratio)

LTV, or loan-to-value ratio, compares your loan amount to the home's value, shown as a percentage. If you borrow $360,000 on a $400,000 home, your LTV is 90%. A lower LTV means more equity, which can affect your rate, your mortgage insurance, and the programs you may qualify for.

Last updated: June 5, 2026

This definition is educational and isn't an offer to lend or financial advice. Rates, programs, and guidelines may change without notice. All loans are subject to credit and property approval.

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