FHA Loan Guide
MIP is the price of FHA's flexibility. Here's the complete chart, how long it really lasts, and the exits that exist.
The short answer
FHA mortgage insurance comes in two parts, per Mortgagee Letter 2023-05: a one-time upfront premium (UFMIP) of 1.75% of the base loan amount, usually financed into the loan, and an annual premium paid monthly, most commonly 0.55%. With less than 10% down, the monthly premium lasts the life of the loan; the usual exit is refinancing into a conventional loan.
Two charges, per ML 2023-05: 1.75% of the base loan amount upfront, plus an annual premium between 0.15% and 0.75% depending on your term, loan size, and loan-to-value. There is no single flat MIP rate; the HUD grid decides yours:
| Loan term | Base loan amount | LTV (down payment) | Annual MIP (2026) |
|---|---|---|---|
| Over 15 years | $726,200 or less | 90% or less | 0.50% |
| Over 15 years | $726,200 or less | 90.01% to 95% | 0.50% |
| Over 15 years | $726,200 or less | Over 95% | 0.55% Most common |
| Over 15 years | Over $726,200 | 90% or less | 0.70% |
| Over 15 years | Over $726,200 | 90.01% to 95% | 0.70% |
| Over 15 years | Over $726,200 | Over 95% | 0.75% |
| 15 years or less | $726,200 or less | 90% or less | 0.15% |
| 15 years or less | $726,200 or less | Over 90% | 0.40% |
| 15 years or less | Over $726,200 | 78% or less | 0.15% |
| 15 years or less | Over $726,200 | 78.01% to 90% | 0.40% |
| 15 years or less | Over $726,200 | Over 90% | 0.65% |
The 0.55% row is where most buyers land: a 30-year loan under the $726,200 threshold with the minimum down payment. That rate reflects HUD's 30-basis-point cut from 0.85%, effective for case numbers on or after March 20, 2023, per ML 2023-05. Here's the honest math on a sample loan, computed from the chart above:
These are estimates for illustration, not quotes; HUD computes the monthly premium on your average annual balance, so the real figure drifts down slightly as you pay the loan. The point stands: MIP is real money, and any FHA conversation that skips it isn't a complete conversation.
UFMIP is a one-time 1.75% charge at closing that nearly everyone finances into the loan. The annual MIP is the recurring premium, billed monthly as part of your payment, per HUD Handbook 4000.1.
Financing the upfront premium means you pay interest on it over the life of the loan, which is usually still the right call for buyers preserving cash, but it's a trade worth seeing in numbers. The annual premium is the one that shapes your monthly budget, and it's also the one with the duration rules below, which is where FHA differs most from everything else.
The rule that surprises people, per HUD Handbook 4000.1: put less than 10% down and the monthly MIP runs for the life of the loan. Put 10% or more down and it runs 11 years.
Since most FHA buyers choose the program precisely for its 3.5% minimum, most FHA loans carry life-of-loan MIP. That is not a flaw to hide; it's a structural fact to plan around. When I quote an FHA scenario, the monthly figure always includes MIP, and the conversation always includes the exit plan, because there is one, and it's the next section.
Not by building equity on a low-down FHA loan; it doesn't cancel at 20% like conventional PMI. The realistic exit is refinancing into a conventional loan once your equity and credit support one without PMI, or with cheap, cancellable PMI.
That exit is common and planned-for: buy with FHA's easier entry, build equity and credit for a few years, then refinance out of MIP when the math clears. Whether and when it clears depends on your equity, credit tier, and the terms available at that time, so I won't promise a date. What I do promise is the honest break-even comparison when you're close, and a "not yet" if refinancing would cost you more than it saves. The 11-year track for 10%-down borrowers ends on its own, per HUD.
Partially, in one specific case: refinance into another FHA loan within 3 years and part of your original UFMIP comes back as a credit toward the new loan's UFMIP, on a sliding scale that shrinks monthly, per HUD Handbook 4000.1.
Partial refund on a sliding scale if refinanced into another FHA loan within 3 years. No refund applies when you sell, pay off the loan, or refinance to conventional. The practical takeaway: if an FHA-to-FHA streamline makes sense for you, sooner is worth more than later, because the refund decays every month. It's one of the inputs I run when we evaluate a streamline.
Three differences, per HUD and the Homeowners Protection Act: FHA charges an upfront premium (PMI has none), FHA's rate barely moves with your credit score (PMI is sharply credit-tiered), and low-down MIP is life-of-loan (PMI cancels at 20% equity).
That makes FHA relatively better for lower credit tiers and conventional relatively better for strong credit, with the crossover depending on your exact file. The full side-by-side, including down payments and who each program fits, lives in the full FHA vs conventional guide.
It depends on the tax year. The deduction for mortgage insurance premiums has lapsed and been revived several times by Congress, and income limits applied when it was active.
I'm a loan officer, not a tax professional, so this one goes to your tax pro with your closing disclosure in hand. What I'll contribute is clean documentation of exactly what you paid, upfront and monthly, so the question takes them minutes to answer.
New to FHA? Start with the complete FHA loan guide.
The grid is general; your loan isn't. I'll show you the upfront and monthly MIP for your price range, what it does to the payment, and the realistic exit plan, before you commit to anything.
Talk to NikoLast updated: June 10, 2026
Important FHA loan disclosures
This page is educational and not an offer to lend or a commitment to make a loan. MIP figures are estimates for illustration, not quotes. Not all applicants will qualify. Premiums and guidelines may change without notice. All loans are subject to credit and property approval.
