# Mortgage insurance premium (MIP)

> MIP is FHA mortgage insurance: an upfront premium plus an annual premium paid monthly. Current rates, how long it lasts and how it differs from PMI.

URL: https://mortgage-math-us.com/glossary/mortgage-insurance-premium/  
Last reviewed: 2026-10-29 · By the MortgageMath US Editorial team

## Quick answer

**Mortgage insurance premium (MIP)** is the mortgage insurance FHA borrowers pay: an [upfront premium](https://mortgage-math-us.com/glossary/upfront-mortgage-insurance-premium/) at closing plus an annual premium divided into the monthly payments. It funds FHA’s insurance, which protects the lender if the borrower defaults.

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| Annual MIP, 30-year loan, more than 95% LTV | 0.55% | [HUD Mortgagee Letter 2023-05](https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-05hsgml.pdf) | Feb 22, 2023 |
| Annual MIP, 30-year loan, 95% LTV or less | 0.5% | [HUD Mortgagee Letter 2023-05](https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-05hsgml.pdf) | Feb 22, 2023 |
| MIP lasts this long if you start at 90% LTV or less | 11 years | [HUD Mortgagee Letter 2023-05](https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-05hsgml.pdf) | Feb 22, 2023 |
| Upfront premium | 1.75% | [HUD Mortgagee Letter 2023-05](https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-05hsgml.pdf) | Feb 22, 2023 |

## Example

With the minimum 3.5% down on a $361,000 home, the base loan is $348,365. The annual MIP on a 30-year loan at that loan-to-value is 0.55%, about $160 a month in the first year (it shrinks a little as the balance falls). Separately, the 1.75% upfront premium adds $6,096, usually financed into the loan.

## How long it lasts

If your starting [loan-to-value ratio](https://mortgage-math-us.com/glossary/loan-to-value-ratio/) is 90% or less, annual MIP ends after 11 years; with less than 10% down, it stays for the life of the loan. Putting down 5% or more drops the 30-year rate to 0.5%.

That’s the big difference from [private mortgage insurance](https://mortgage-math-us.com/glossary/private-mortgage-insurance/), which ends on its own when the balance reaches 78% of the original value. Many FHA borrowers drop MIP by refinancing into a conventional loan once they have enough equity. The [FHA loans guide](https://mortgage-math-us.com/loan-types/fha-loans/) and [FHA vs conventional](https://mortgage-math-us.com/blog/fha-vs-conventional/) compare the total cost.

## Sources

- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25077?g=010XX00US) — Median value of owner-occupied homes (2024 ACS 1-year)
- [CFPB](https://www.consumerfinance.gov/owning-a-home/prepare/figure-out-how-much-you-want-to-spend/) — Minimum FHA down payment (Oct 28, 2026)
- [HUD Mortgagee Letter 2023-05](https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-05hsgml.pdf) — FHA annual MIP, 30-year loan, more than 95% LTV; FHA upfront mortgage insurance premium; FHA annual MIP ends after 11 years when the starting LTV is at or below (Feb 22, 2023)
- [CFPB](https://www.consumerfinance.gov/ask-cfpb/when-can-i-remove-private-mortgage-insurance-pmi-from-my-loan-en-202/) — PMI ends automatically at this share of original value (Oct 28, 2026)
- [CFPB: What is mortgage insurance and how does it work?](https://www.consumerfinance.gov/ask-cfpb/what-is-mortgage-insurance-and-how-does-it-work-en-1953/)

_General information, not financial advice._