Key Takeaways
- How much is FHA PMIdepends on loan size, term, and down payment
- FHA loans don’t use traditional PMI—they use MIP
- MIP includes an upfront fee of 1.75%and a monthly premium
- You may pay MIP for the full loan term unless you refinance
- FHA loans remain a good fit for many first-time or low-credit buyers
- MIP can be lowered or removed with the right strategy
How Much Is FHA PMI
When exploring FHA loans, one of the most common questions buyers ask is how much is FHA PMI. While FHA loans make homeownership more accessible with lower down payment and credit score requirements, they come with a cost—mortgage insurance. But here’s the catch: what you pay on an FHA loan isn’t actually PMI in the traditional sense.
In this guide, we’ll break down how FHA mortgage insurance works, how much you can expect to pay, and how it compares to private mortgage insurance on conventional loans. We’ll also cover when and how you might be able to reduce or remove this cost.
Whether you’re a first-time buyer or considering refinancing, understanding FHA insurance costs is essential.
FHA PMI vs Mortgage Premium Insurance
Let’s clear something up right away. While most people search for “FHA PMI,” what they’re really referring to is mortgage premium insurance/mortgage insurance premium—also known as MIP. FHA loans don’t use private mortgage insurance (PMI)like conventional loans do. Instead, the Federal Housing Administration requires its own version: mortgage insurance premium.
Do FHA Loans Have PMI?
No—FHA loans don’t have PMI. But that doesn’t mean you’ll avoid insurance costs. Every FHA borrower pays MIP, which comes in two forms:
- Upfront MIP (UFMIP): A one-time fee paid at closing or rolled into the loan
- Annual MIP: An ongoing monthly payment included in your mortgage bill
We explore this difference in detail in our guide: Do FHA loans have PMI?
What Is the Upfront FHA MIP?
The upfront mortgage insurance premiumis a fixed 1.75% of your total loan amount. This means if you’re borrowing $250,000, you’ll owe $4,375 as an upfront MIP. You can either pay this at closing or roll it into your loan.
While it’s a one-time fee, it increases your loan balance if financed, which means slightly higher monthly payments over time.
How Much Is FHA PMI Monthly?
This is where most buyers want answers. Your monthly FHA mortgage insurance premiumdepends on three main factors:
- Loan amountÂ
- Loan term (15 or 30 years)Â
- Down payment percentageÂ
Here’s a simplified breakdown of annual MIP rates as of 2025:
| Loan Term | Loan Amount | Down Payment | Annual MIP |
| 30 years | ≤ $726,200 | < 5% | 0.55% |
| 30 years | ≤ $726,200 | ≥ 5% | 0.50% |
| 15 years | ≤ $726,200 | < 10% | 0.40% |
| 15 years | ≤ $726,200 | ≥ 10% | 0.15%–0.25% |
For example, on a $250,000 FHA loan with 3.5% down (typical minimum), your monthly MIPwould be:
- Annual MIP = 0.55% of $250,000 = $1,375
- Monthly MIP = $1,375 ÷ 12 = $114.58
PMI on FHA Loan vs Conventional Loan
Unlike FHA loans, PMI on a conventional loanis based on credit score, loan-to-value ratio, and other risk factors. It can be cheaper for borrowers with strong credit and larger down payments. Importantly, PMI can usually be canceled when the borrower reaches 20% equity.
FHA MIP cannot be canceledunless you refinance or put down at least 10% at purchase—then it drops off after 11 years.
How Long Do You Pay MIP on an FHA Loan?
The duration of your MIP payments depends on your down payment:
- Less than 10% down: MIP lasts for the life of the loanÂ
- 10% or more down: MIP lasts 11 years
That’s why many buyers plan to refinance into a conventional loanonce they’ve built enough equity and improved their credit.
Can You Remove FHA Mortgage Insurance?
FHA mortgage insurance does not drop off automatically like conventional PMI. But you do have a few options to get rid of it:
- Refinance to a conventional loanonce you reach 20% equityÂ
- Pay down your loan fasterto reach refinance eligibility soonerÂ
- If your loan is older and meets certain legacy rules, you may be eligible for cancellation
Factors That Influence FHA MIP Costs
Your mortgage insurance costs aren’t always set in stone. Here’s what affects them:
- Loan term: 15-year loans generally have lower MIPÂ
- Down payment size: More money down means lower MIP ratesÂ
- Loan amount: Higher loan balances usually mean higher monthly premiums
Refinance timing: Refinancing when equity is 20%+ can eliminate MIP entirely
FHA Streamline Refinance and MIP
If you already have an FHA loan, the FHA Streamline Refinancecan reduce your MIP costs without needing a full credit check or new appraisal. Here’s how it helps:
- You may qualify for a reduced upfront MIP of 0.01%Â
- Monthly MIP still applies but may be based on a lower rateÂ
- You must be current on your loan and meet seasoning requirements
This is a smart way to cut costs for current FHA homeowners.
Should You Still Choose an FHA Loan?
Even with mortgage insurance, FHA loans offer major advantages:
- Easier approval for buyers with credit scores as low as 580Â
- Only 3.5% down requiredÂ
- Competitive interest ratesÂ
- Great for first-time buyers or those rebuilding credit
If you can’t qualify for a conventional loan just yet, the benefits of FHA loans may outweigh the long-term cost of MIP.
Ready to Understand Your FHA Loan Costs?
Mortgage insurance doesn’t have to be confusing. At Clear Mortgage LLC, we help Kansas homebuyers understand every piece of the puzzle—from how much is FHA PMIto what their total monthly payments will look like.
Let our team walk you through your loan options, explore refinance opportunities, and get you closer to owning your home with confidence.
Contact us todayfor expert help with FHA loans and mortgage insurance.
Adriana Bates works with her clients during the loan process as a confidant, educator, and adviser. Adriana not only identifies their financial situation but also strives to understand her client’s priorities during this process.
She believes in the value of making educated decisions and wants to provide her clients with enough knowledge so they are empowered to do so. Adriana also serves to advise them throughout the process on what to expect from Clear Mortgage LLC LLC, and what their role entails, in order to make the process as smooth as possible.
Adriana is involved in the initial education/consultation, discussing her client’s options, talking with them during the process, and then ensuring everyone gets to the closing table.
