Mortgage

Mortgage Insurance Premium (MIP) The mortgage insurance you pay on an FHA loan to protect the lender if you default

Priya Shah By Priya Shah, Senior Mortgage Editor · Updated 2026-06-09
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Mortgage Insurance Premium (MIP) is the insurance required on FHA loans that protects the lender against losses if you stop paying. It comes in two parts: an upfront premium of 1.75% of the loan amount, which you can roll into the loan, plus an annual premium of roughly 0.15%–0.75% depending on your loan term and loan-to-value ratio. That annual portion is split into monthly charges added to your payment. If you put down less than 10%, MIP typically lasts the life of the loan, meaning you'd need to refinance into a conventional loan to remove it. MIP is distinct from conventional PMI, which applies to non-FHA loans and can usually be canceled once you reach enough equity. The exact rate varies by your specific loan details.
Also Known As
FHA mortgage insurance Upfront MIP (UFMIP) Annual MIP FHA insurance premium
Used in Context
  1. Because she made a 3.5% down payment on her FHA loan, her MIP will stay in place for the life of the loan unless she refinances.
  2. The lender added the 1.75% upfront MIP to his loan balance instead of requiring it at closing.
  3. When a buyer compares FHA quotes from Dreamy Leads, the annual MIP is built into the monthly payment estimate so there are no surprises.
Related Terms
Mortgage PMI (Private Mortgage Insurance) Lender protection required on low-down-payment conventional loans — until you reach 20% equity Mortgage FHA Loan A government-backed mortgage with low down payments for buyers with moderate credit Mortgage LTV (Loan-to-Value) The percentage of a property's value financed by a mortgage — key to rates and PMI Mortgage Amortization The schedule that shows how each loan payment splits between principal and interest over time
Frequently Asked Questions

How much does MIP cost on an FHA loan?

You'll pay an upfront premium of 1.75% of the loan amount, which can be financed into the loan, plus an annual premium of roughly 0.15% to 0.75% depending on your loan term and loan-to-value ratio. The annual portion is divided into monthly charges on your payment.

Can I ever get rid of MIP?

It depends on your down payment. If you put down less than 10%, MIP generally lasts the life of the loan, so refinancing into a conventional loan is usually the only way to remove it. With more down, MIP may drop off after a set period, depending on your loan terms.

Is MIP the same as PMI?

No. MIP applies specifically to FHA loans and includes both an upfront and annual premium. PMI is private mortgage insurance on conventional loans and can typically be canceled once you build enough equity. They serve a similar purpose but follow different rules and cost structures.

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