Mortgage Guide
FHA MIP Calculator: How Much Is Mortgage Insurance Premium?
Last updated: September 2026
FHA loans are popular with first-time buyers because they allow down payments as low as 3.5%. But that accessibility comes with a catch: FHA Mortgage Insurance Premium (MIP) — and unlike conventional PMI, it often lasts the entire life of the loan.
If you are considering an FHA loan, you need to know exactly how much MIP costs, how it is structured, and whether you can ever get rid of it. This guide walks you through the numbers.
FHA MIP vs. Conventional PMI: The Critical Difference
| Feature | Conventional PMI | FHA MIP |
|---|---|---|
| Minimum down payment | 3% | 3.5% |
| Upfront premium | None | 1.75% of loan amount |
| Annual premium | 0.3% – 1.2% | 0.15% – 0.75% |
| Cancellation | Automatic at 78% LTV | Usually permanent |
| Removal method | Automatic or request | Refinance to conventional only |
The biggest difference: FHA MIP does not automatically drop off. On most FHA loans originated after June 3, 2013, the annual MIP remains for the life of the loan unless you refinance into a conventional mortgage.
FHA MIP Cost Breakdown
FHA MIP has two parts:
1. Upfront MIP (UFMIP)
- Rate: 1.75% of the base loan amount
- Paid at closing or financed into the loan
- Not refundable if you refinance or sell quickly
2. Annual MIP
- Paid monthly as part of your mortgage payment
- Rate depends on loan term, loan amount, and down payment
Example: $350,000 Home with 3.5% Down
| Cost Component | Calculation | Amount |
|---|---|---|
| Base loan amount | $350,000 × 96.5% | $337,750 |
| Upfront MIP | $337,750 × 1.75% | $5,911 |
| Financed loan amount | $337,750 + $5,911 | $343,661 |
| Annual MIP rate | 30-year, <95% LTV | 0.55% |
| Annual MIP | $343,661 × 0.55% | $1,890 |
| Monthly MIP | $1,890 ÷ 12 | $158 |
Total first-year MIP cost: $5,911 (upfront) + $1,890 (annual) = $7,801
Monthly Payment Comparison: FHA vs. Conventional
Using the same $350,000 home, 3.5% down, 7.0% interest rate:
| Loan Type | Principal & Interest | Mortgage Insurance | Total PITI (est.) |
|---|---|---|---|
| Conventional (5% down + PMI) | $2,264 | $178 (PMI) | ~$2,850 |
| FHA (3.5% down + MIP) | $2,287 | $158 (MIP) | ~$2,820 |
At first glance, FHA looks cheaper. But remember:
- The upfront MIP added $5,911 to your loan balance
- The MIP never cancels — over 30 years, that is $56,880 in monthly MIP alone
- Conventional PMI cancels around year 9, saving you ~$13,000 in remaining PMI
When Can You Remove FHA MIP?
| Loan Origination Date | Down Payment | MIP Duration |
|---|---|---|
| Before June 3, 2013 | Any | Cancels at 78% LTV after 5 years |
| After June 3, 2013 | <10% | Life of loan |
| After June 3, 2013 | ≥10% | 11 years |
Most FHA borrowers today fall into the "life of loan" category. The only escape is refinancing to a conventional loan once you have 20% equity.
How to Calculate Your Exact FHA MIP
The math is straightforward but tedious. The fastest way is to use a mortgage calculator that includes FHA MIP as a built-in input.
Try it now: Use our free mortgage calculator and select "FHA" as the loan type. Enter your home price, down payment, and interest rate. The calculator automatically applies:
- The 1.75% upfront MIP (financed into the loan)
- The correct annual MIP rate based on your LTV
- Monthly MIP in your payment breakdown
- The full amortization schedule
You will see your true monthly payment — not just principal and interest — in under 10 seconds.
Is FHA MIP Worth It?
FHA loans make sense when:
- Your credit score is below 620 (conventional loans get expensive)
- You have minimal savings and need the lowest down payment possible
- You plan to refinance within 5–7 years once you build equity
FHA loans do not make sense when:
- You have 10%+ down and a 680+ credit score (conventional is usually cheaper long-term)
- You plan to stay in the home for 20+ years without refinancing
- You hate the idea of paying mortgage insurance forever
Bottom Line
FHA MIP is not just "another fee." It is a permanent cost on most modern FHA loans — $158/month in our example, or nearly $57,000 over 30 years. The 1.75% upfront premium adds thousands more to your loan balance before you make your first payment.
Before you choose FHA, calculate the true cost. Use a calculator that includes both upfront and annual MIP so you can compare FHA side-by-side with conventional, VA, and USDA options.