FHA Mortgage Insurance Premium Chart and Guidelines



FHA MIP Rates & Requirements

FHA loans require mortgage insurance for the life of the loan if you put less than 10% down. If you put more than 10% down you have to carry mortgage insurance for 11 years.

FHA Mortgage Insurance Duration

• Down payment of 10% or more MIP duration is 11 years 

• Down payment of less than 10% MIP will be required for the life of the loan

The MIP rate depends on the down payment and loan amount. For most FHA borrowers their MIP rate will be 0.85%.

FHA Mortgage Insurance Premium Rates

Loan Amount $625,500 or less 

      Down payment

MIP rate

MIP duration

30-year fixed-rate mortgage

<10%

>10%

0.85%

0.80%

     Life of the loan

11 years

15-year fixed-rate mortgage

>10%

             0.45%
 0.70%
     Life of the loan

11 years

$625,500 Loan Amount or higher

Down payment

MIP rate

MIP duration

30-year fixed-rate mortgage

<10%

>10%

1.05%

1.00%

Life of the loan

11 years

15-year fixed-rate mortgage

<10%

>10%

             0.95%

0.70%

Life of the loan

11 years

What are FHA Loans?

The Federal Housing Administration was created to help first-time homebuyers. The FHA guarantees a mortgage if a borrower defaults on a loan making loans less risky and allowing lenders to lower their requirements.

You can qualify for an FHA loan with a 580 credit score and a 3.5% down payment.

Speak to lenders and get current rates

What is FHA Mortgage Insurance?

Mortgage insurance is required on all FHA loans regardless of how the down payment amount. The FHA MIP rate is typically 0.85% of the loan amount. The upfront MIP fee is 1.75% of the loan amount.

FHA MIP is an insurance policy for your mortgage loan in case you ever default on the loan. Having mortgage insurance reduces the lender’s risk, allowing them to reduce their requirements, helping more people qualify.

Upfront FHA Mortgage Insurance Premium

The upfront premium is 1.75 basis points (1.75%) of the loan amount and is rolled into your loan.

The upfront mortgage insurance premium is collected at the time you close or rolled into your loan amount. If you refinance your FHA mortgage within the three years of closing, you will receive a refund for the unused upfront MIP.

Annual FHA Mortgage Insurance Premium

The annual premium is divided into 12 monthly payments and is included in your mortgage payment. MIP is required for all FHA loans.

You must carry MIP for the life of the loan. You will pay an annual mortgage insurance premium between .80 and .85 basis points depending on your loan’s loan-to-value ratio.

This is actually a great deal; the FHA mortgage insurance premium used to be over 1%. However, it was recently lowered per Mortgagee Letter 2015-01.

How to get rid of MIP on FHA Loans

You can avoid paying mortgage insurance after paying down your loan-to-value ratio on your FHA loan to 78% by refinancing your FHA loan to a conventional loan.

Contact your lender and ask them if you’re eligible to have your annual insurance premium removed.

If you put less than 10% down on an FHA loan you will have to pay the MIP for the life of the loan. You can remove PMI after 11 years if your down payment is higher than 10%.

How much is the FHA Mortgage Insurance Premium?

Borrowers who put down 10% or less, the PMI is .85%. If a borrower puts down more than 10%, then the MIP goes down slightly to .80%.

For example, if you buy a $200,000 home and put in a 3.5% downpayment.

The LTV is 96.5%, so you have to pay a PMI of .85%, roughly $1700 per year. You can figure the amount you will have to pay for mortgage insurance using the FHA MIP chart below.

How to avoid paying Mortgage Insurance?

If you want to get a mortgage without having to carry mortgage insurance you will need to be a veteran, have 20% down, or get a piggyback loan.

Conventional Loans

You can avoid paying PMI by getting a conventional loan and putting 20% as a downpayment. This is the ideal scenario. However, most people do not have that kind of cash lying around.

Piggyback Loans

Another option is a piggyback 80-10-10 loan. This is where you put 10% down, get a loan for 80% of the purchase price, and get a 10% second mortgage loan, which would allow you to avoid paying PMI.

Some lenders offer an 80-10-10 piggyback loan. You need a 10% downpayment and would receive a loan for 80% of the home price and another for 10%.

VA Loans

If you’re a veteran, you can get a VA loan, which not only doesn’t require any mortgage insurance. It doesn’t require a downpayment either.

USDA Loans

If you live in a rural area, you can get a USDA loan with cheaper mortgage insurance rates than FHA loans do. The FHA rate is 0.85% of the loan amount compared to the USDA MIP rate of just 0.35%. On a $250,000 loan, mortgage insurance on a USDA loan is $100 less a month than FHA loans.