What Is Mortgage Insurance Premium?

Introduction

The mortgage insurance premium (MIP) is the fee paid for mortgage insurance when you put down less than 20%. For FHA loans, MIP includes an upfront premium (paid at closing) and an annual premium (paid monthly). For conventional loans, the equivalent is PMI. See What Is PMI and What Is Mortgage Insurance.

Frequently Asked Questions

What is mortgage insurance premium (MIP)?

MIP is the fee paid for mortgage insurance. For FHA loans, it includes an upfront premium (paid at closing) and an annual premium (paid monthly). For conventional loans, the equivalent is PMI.

When is MIP required?

FHA loans typically require MIP for the life of the loan if you put down less than 10%, or for 11 years if you put down 10% or more. Conventional loans use PMI when LTV exceeds 80%.

How much does MIP cost?

FHA upfront MIP is typically 1.75% of the loan amount. Annual MIP varies by loan term, amount, and LTV. See Upfront Mortgage Insurance Explained and Monthly Mortgage Insurance Explained.

Can I remove MIP?

FHA MIP is often required for the life of the loan on high-LTV loans. Refinancing to a conventional loan (once you have 20%+ equity) can eliminate it. Conventional PMI can be removed at 80% LTV.