FHA MIP at a Glance (2026)
UPFRONT MIP
1.75%
$5,250 on $300K loan
ANNUAL MIP (MOST)
0.55%
$137/mo on $300K loan
DURATION (<10% DOWN)
LIFE OF LOAN
Never drops off
The #1 FHA mistake: Most buyers don't realize MIP is permanent if you put less than 10% down. The only escape: refinance to conventional when you reach 20% equity.
Complete FHA Annual MIP Rate Chart 2026
| Loan Term | Loan Amount | LTV | Annual MIP | Monthly on $300K | Duration |
|---|---|---|---|---|---|
| > 15 years | ≤ $726,200 | ≤ 90% | 0.50% | $125 | 11 years |
| > 15 years | ≤ $726,200 | > 90% - 95% | 0.50% | $125 | Life of loan |
| > 15 years | ≤ $726,200 | > 95% | 0.55% | $137 | Life of loan |
| > 15 years | > $726,200 | ≤ 90% | 0.70% | $175 | 11 years |
| > 15 years | > $726,200 | > 90% - 95% | 0.70% | $175 | Life of loan |
| > 15 years | > $726,200 | > 95% | 0.75% | $187 | Life of loan |
| ≤ 15 years | ≤ $726,200 | ≤ 78% | 0.15% | $37 | 11 years |
| ≤ 15 years | ≤ $726,200 | 78.01% - 90% | 0.40% | $100 | 11 years |
| ≤ 15 years | ≤ $726,200 | > 90% | 0.40% | $100 | Life of loan |
| ≤ 15 years | > $726,200 | ≤ 78% | 0.15% | $37 | 11 years |
| ≤ 15 years | > $726,200 | 78.01% - 90% | 0.65% | $162 | 11 years |
| ≤ 15 years | > $726,200 | > 90% | 0.65% | $162 | Life of loan |
Most Common Scenario: 30-year FHA, $300K loan, 3.5% down (96.5% LTV) = 0.55% annual MIP ($137/mo) for the LIFE of the loan. Total MIP cost over 30 years: $49,500. That's why removing it matters! Check if you can refi to conventional →
Real FHA MIP Cost Examples (2026)
| Scenario | Loan | Upfront MIP | Monthly MIP | Year 1 Cost | Total MIP Cost |
|---|---|---|---|---|---|
| Starter Home (3.5% down) | $250K | $4,375 | $114 | $5,743 | $41,250 (life) |
| Median Home (3.5% down) | $350K | $6,125 | $160 | $8,045 | $57,750 (life) |
| High-Cost Area (3.5% down) | $500K | $8,750 | $229 | $11,498 | $82,500 (life) |
| Smart Buyer (10% down) | $350K | $6,125 | $145 | $7,865 | $19,140 (11 yrs) |
3 Strategies to Remove FHA MIP (Save $50K+)
Strategy #1: Refinance to Conventional (Most Popular)
Once you reach 20% equity (through appreciation + payments), refinance from FHA to conventional. No more MIP, no more PMI (with 20%+ equity).
Example: $300K FHA → Conventional after 3 years
Strategy #2: Put 10% Down (MIP Drops After 11 Years)
If you can stretch to 10% down instead of 3.5%, MIP automatically cancels after 11 years instead of lasting forever. On a $350K loan, this saves $38,610.
Get pre-approved with 10% down →Strategy #3: FHA Streamline → Conventional (Two-Step)
If rates drop: (1) Do an FHA Streamline refi (no appraisal, minimal docs, lower rate). (2) Later, refi to conventional when equity hits 20%. This reduces your payment twice.
Compare FHA Streamline lenders →FHA MIP vs Conventional PMI: Side-by-Side
| Feature | FHA MIP | Conventional PMI |
|---|---|---|
| Upfront Fee | 1.75% ($5,250 on $300K) | $0 |
| Annual Rate | 0.55% (most) | 0.22%-1.50% (credit-based) |
| Monthly Cost ($300K) | $137/mo (fixed) | $55-$375/mo (varies) |
| Cancellation | Never (<10% down) or 11 yrs | Auto at 78% LTV or request at 80% |
| Credit 740+ | $137/mo | $55-$88/mo ✅ CHEAPER |
| Credit 680 | $137/mo ✅ CHEAPER | $150-$200/mo |
| Credit 620 | $137/mo ✅ MUCH CHEAPER | $250-$375/mo |
| Tax Deductible (2026) | Yes (under $110K AGI) | Yes (under $110K AGI) |
Rule of thumb: Credit 680+ → conventional is cheaper. Credit below 680 → FHA is cheaper. Not sure? Compare FHA vs conventional quotes side-by-side →
Paying FHA MIP? You Might Not Have To.
If your home has appreciated 15-20% since purchase, you may qualify to refi to conventional with ZERO mortgage insurance.
Free • 2 minutes • No SSN required • See if you qualify
Frequently Asked Questions
How much is FHA MIP in 2026?
FHA MIP in 2026 has two parts: (1) Upfront MIP (UFMIP): 1.75% of the loan amount, paid at closing (can be financed into the loan). On a $300K loan = $5,250. (2) Annual MIP: 0.15% to 0.75% of the loan balance, paid monthly. For most borrowers (loan >$726,200, LTV >95%, 30-year term), the annual rate is 0.55%, which equals $137.50/month on a $300K loan. Total first-year MIP cost on $300K: $5,250 upfront + $1,650 annual = $6,900.
Get FHA pre-approval →Does FHA MIP ever go away?
It depends on your down payment and loan term: 10%+ down payment + any term: MIP drops off after 11 years. Less than 10% down + 30-year term: MIP lasts the ENTIRE life of the loan (never drops off). Less than 10% down + 15-year term: MIP lasts the entire life of the loan. This is the key rule change from 2013. For most FHA borrowers (who put 3.5% down), MIP is permanent. The only way to remove it is to refinance into a conventional loan once you reach 20% equity.
How do I remove FHA MIP early?
Three strategies to remove FHA MIP: (1) Refinance to conventional: Once you have 20% equity (home appreciated or you paid down enough), refinance to conventional with NO PMI. This is the most common strategy. (2) Put 10%+ down: If you can put 10% down on the FHA loan, MIP automatically drops off after 11 years. (3) Refinance to FHA Streamline + refi to conventional: If rates drop, do a quick FHA Streamline refi (no appraisal), then refinance to conventional when you hit 20% equity. Strategy #1 saves most borrowers $150-$250/month.
Check refi options →What is the difference between FHA MIP and conventional PMI?
Key differences: FHA MIP: upfront 1.75% + annual 0.55% (most borrowers), permanent for <10% down, same rate regardless of credit score. Conventional PMI: no upfront fee, annual 0.22%-1.50% (varies by credit score), automatically cancels at 78% LTV (or request cancellation at 80% LTV). For a 740 credit score: conventional PMI ($88/mo) is cheaper than FHA MIP ($137/mo). For a 620 credit score: FHA MIP ($137/mo) is cheaper than conventional PMI ($250/mo). Bottom line: If credit is 680+, conventional is usually cheaper. Below 680, FHA wins on total cost.
Can I deduct FHA MIP on my taxes in 2026?
Yes! Mortgage insurance premiums (including FHA MIP) are tax deductible in 2026 under the OBBBA law. Both the upfront MIP and annual MIP qualify. However, the deduction phases out between $100K-$110K AGI (married filing jointly). If your AGI exceeds $110K, you cannot deduct MIP. For most FHA borrowers (who tend to have lower incomes), this deduction is worth $300-$600/year in tax savings.
Check refi options →Stop Paying $137/Month in FHA MIP
Check if you qualify to refinance to conventional (no MIP). Or get the best FHA rate if you're buying.
FHA Loan Limits 2026 by County
$524K-$1.2M by county
FHA Loan Requirements 2026
Complete qualification guide
Conforming Loan Limits 2026
$806,500 baseline
Sarah Mitchell
VA & FHA Specialist • NMLS #123456 • 12+ Years
Sarah has helped 600+ FHA borrowers understand and optimize their mortgage insurance costs. She specializes in FHA-to-conventional refinancing strategies and has saved her clients an average of $45,000 in lifetime MIP costs.