Loan programs
FHA mortgage insurance premium (MIP)
Abbreviation: MIP
Definition
FHA mortgage insurance premium (MIP) is the insurance charged on FHA-insured loans. It has two parts: an upfront premium of 1.75% of the base loan, usually financed into the loan, and an annual premium paid monthly — 0.55% a year in the most common case of a 30-year loan with under 5% down.
FHA mortgage insurance premium (MIP), explained
Annual MIP rates were cut by 30 basis points by HUD Mortgagee Letter 2023-05, effective March 20, 2023. Rates range roughly from 0.15% to 0.75% depending on term, loan size and loan-to-value.
With less than 10% down, annual MIP generally lasts for the life of the loan; with 10% or more it lasts 11 years.
See MIP in a calculator
The FHA Loan Calculator shows how this works with real numbers. FHA mortgage payment including upfront and annual mortgage insurance premiums (MIP).
Open the FHA Loan CalculatorRelated terms
- Private mortgage insurance (PMI)Private mortgage insurance (PMI) protects the lender on a conventional loan when the borrower puts down less than 20%.
- FHA loanAn FHA loan is a mortgage insured by the Federal Housing Administration, part of HUD.
- Loan-to-value ratio (LTV)Loan-to-value (LTV) is the loan amount divided by the property’s appraised value or price, whichever is lower, expressed as a percentage.
Q.01What is MIP (FHA mortgage insurance premium)?
Q.02How much is FHA upfront MIP?
Q.03Can FHA MIP be removed?
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