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How FHA mortgage insurance works
FHA loans charge two premiums. Upfront MIP is 1.75% of the base loan, usually added to the loan. Annual MIP is split into monthly payments. For most borrowers (30-year term, base loan up to $726,200) it is 0.55% with less than 5% down and 0.50% with 5% or more. See the full FHA MIP chart.
Worked example
Price $300,000, 3.5% down ($10,500). Base loan $289,500. Upfront MIP 1.75% = $5,066.25, financed, so the loan is $294,566.25. Principal and interest at 6.5% for 30 years: $1,861.86. Annual MIP 0.55% × $294,566 ÷ 12 = $135.01. Total before tax and insurance: $1,996.87.
FHA payment by price (3.5% down, 6.5%, 30 years)
| Home price | Loan incl. UFMIP | P&I | Monthly MIP | P&I + MIP |
|---|---|---|---|---|
| $200,000 | $196,378 | $1,241 | $90 | $1,331 |
| $250,000 | $245,472 | $1,552 | $113 | $1,664 |
| $300,000 | $294,566 | $1,862 | $135 | $1,997 |
| $350,000 | $343,661 | $2,172 | $158 | $2,330 |
| $400,000 | $392,755 | $2,482 | $180 | $2,662 |
| $500,000 | $490,944 | $3,103 | $225 | $3,328 |
How long MIP lasts
With more than 10% down (LTV at or below 90%), annual MIP ends after 11 years. With 10% or less down, it lasts for the life of the loan; most borrowers who want to drop it refinance into a conventional loan once they have about 20% equity.
Other FHA rules
Minimum down payment is 3.5% with a credit score of 580 or higher (10% at 500–579). FHA loan limits vary by county, and the home must meet FHA property standards. The monthly MIP shown is the first-year figure; it declines slightly as the balance falls.
Example rates are for comparison only, not offers or current quotes. Your rate depends on credit, loan-to-value and lender.
Sources and assumptions
- HUD Mortgagee Letter 2023-05 (annual MIP rates; 1.75% upfront MIP)
- HUD: FHA loans
Related
Frequently asked questions
How much is FHA mortgage insurance in 2026?
Upfront MIP is 1.75% of the base loan. Annual MIP for a 30-year loan up to $726,200 is 0.55% with under 5% down or 0.50% with 5% or more down.
Can you remove FHA MIP?
If you put more than 10% down, it ends after 11 years. Otherwise it lasts for the life of the loan unless you refinance out of FHA.
What is the minimum down payment for an FHA loan?
3.5% with a credit score of 580 or higher, or 10% with a score of 500 to 579.
Is upfront MIP paid at closing?
It can be paid in cash, but most borrowers add it to the loan amount, as this calculator does.