Refinancing

How to Remove FHA Mortgage Insurance (MIP): Rules and Options

FHA mortgage insurance can last 11 years or the life of the loan. Here's how MIP works, when it ends on its own and the smartest ways to drop it sooner.

By Shivam Kaushik · Updated November 5, 2026 · 5 min read

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Quick answers

The rule: for FHA loans with case numbers assigned on or after June 3, 2013, annual mortgage insurance (MIP) lasts 11 years if you put at least 10% down; otherwise it usually lasts for the life of the loan.
The cost: most FHA borrowers pay a 1.75% upfront premium plus an annual premium, commonly 0.55% for a 30-year loan with less than 5% down.
The main exit: refinance into a conventional loan once you have enough equity (often 20%) to skip private mortgage insurance.
Older loans: FHA loans from before June 2013 follow older rules where MIP can end at about 78% loan-to-value.

FHA loans are a fantastic on-ramp to homeownership: low down payments, flexible credit. The price of that flexibility is mortgage insurance, and for most borrowers it sticks around a lot longer than PMI on a conventional loan. The good news is you’re not stuck forever. Here’s how FHA mortgage insurance works, when it falls off on its own and how to get rid of it sooner.

The two parts of FHA mortgage insurance

Piece	How much	How it’s paid
Upfront MIP (UFMIP)	1.75% of the base loan	Usually added to the loan balance at closing
Annual MIP	0.15% to 0.75% a year; 0.55% is most common	Divided by 12 and added to your monthly payment

Annual rates depend on your loan amount, term and down payment, per HUD Mortgagee Letter 2023-05, which cut most annual rates by 0.30 points in March 2023. Here are the common rates for 30-year loans at or below $726,200:

Down payment (LTV at origination)	Annual MIP	How long it lasts
10% or more (90% LTV or less)	0.50%	11 years
5% to under 10% (90.01%–95% LTV)	0.50%	Life of loan
Under 5% (above 95% LTV)	0.55%	Life of loan

Loans above $726,200 and loans with terms of 15 years or less have different rates. Your Loan Estimate shows your exact premium; see our loan estimate guide.

ExampleAvery buys a $300,000 home with 3.5% down. The base loan is $289,500. Upfront MIP is about $5,066, which gets added to the loan, bringing it to about $294,566. Annual MIP at 0.55% adds about $133 a month. Because Avery put down less than 10%, that $133 stays for the life of the loan unless Avery refinances or pays the loan off.

Option 1: Wait it out (if you put 10% down)

If your loan started at 90% loan-to-value or less, annual MIP ends after 11 years automatically. You don’t need to ask; your servicer should remove it. That’s a solid outcome if you plan to stay put, but 11 years is a long time to pay extra.

Option 2: Refinance into a conventional loan

This is the main way most FHA borrowers drop mortgage insurance. Once your home’s value has risen and/or you’ve paid down the loan so that you owe 80% or less of the value, a conventional loan won’t require PMI at all. Even with less equity, conventional PMI can be cheaper than FHA MIP for borrowers with strong credit, and it can be cancelled later.

Check your equity: estimate your home’s value and divide your loan balance by it.
Check your credit: conventional loans price more heavily on credit score. See credit scores for a mortgage.
Do the break-even math: closing costs can wipe out the savings if rates are higher now than your current rate. Use the refinance calculator.

Myth buster“Once I reach 20% equity, FHA will drop my MIP.” Not for most loans made after June 3, 2013. Unlike conventional PMI, FHA MIP doesn’t cancel at 20% or 22% equity. The 78% rule only applies to older FHA loans. To drop it, you typically need to refinance out of FHA.

The rate trap to watch for

Refinancing to ditch MIP only makes sense if the new rate and costs work. If you locked an FHA loan at 6% and today’s conventional rates are above 7% (Freddie Mac’s 30-year average was 7.18% for the week of November 5, 2026), your new principal and interest could rise more than the MIP you’d save.

A quick test: on a $290,000 balance, MIP at 0.55% costs about $133 a month. If refinancing raises your principal and interest by more than that, the swap loses money, unless you’re also shortening the term or cashing out for a specific goal. Our when to refinance guide walks through break-even math.

Option 3: Pay the loan down faster

Extra payments don’t cancel FHA MIP on newer loans, but they shrink the balance, which lowers the dollar amount of MIP over time and gets you to 80% loan-to-value sooner for a conventional refinance. Test scenarios in the extra payment calculator.

Option 4: An FHA streamline refinance (to cut cost, not remove MIP)

An FHA streamline refinance won’t remove MIP, but if rates have dropped it can lower your payment with less paperwork. If you refinance FHA to FHA within three years, you may get a partial refund of your upfront MIP to apply to the new loan. Read more in our FHA streamline refinance guide.

Fun factFHA mortgage insurance doesn’t protect you. It protects the lender if you default, which is exactly why lenders can offer FHA loans with as little as 3.5% down.

Quick decision guide

Your situation	Best move
Put 10%+ down and plan to stay	Let MIP end after 11 years
20%+ equity, good credit, today’s rate near or below yours	Refinance to conventional
20%+ equity but today’s rates far above yours	Wait; recheck when rates fall
Little equity	Pay down principal and watch home values

Want the bigger picture on mortgage insurance? Compare with conventional PMI in what PMI is and how to get rid of it, and estimate FHA costs in the FHA loan calculator.

FAQ

Does FHA mortgage insurance ever go away?

Yes, after 11 years if you put at least 10% down on a loan from June 3, 2013 or later. Otherwise it usually lasts the life of the loan unless you refinance.

How do I remove MIP from my FHA loan?

The most common way is refinancing into a conventional loan once you have enough equity, ideally 20%, so no PMI is needed.

How much is FHA MIP?

Upfront MIP is 1.75% of the base loan. Annual MIP is commonly 0.50% to 0.55% for 30-year loans under $726,200.

Can I get a refund of my upfront MIP?

Partially, if you refinance into another FHA loan within three years. There’s no refund if you refinance to a conventional loan.

Sources: HUD Mortgagee Letter 2023-05 (annual MIP rates); HUD FHA Single Family Housing Policy Handbook 4000.1 (MIP duration and upfront premium); Consumer Financial Protection Bureau guides on mortgage insurance; Freddie Mac PMMS (Nov 5, 2026). Payment examples computed by Keys & Coffee. This article is general education, not financial advice. Keys & Coffee is not a lender.

Written by

Shivam Kaushik· IMSHIVA

Founder & Director, QuibbleTech Solutions Pvt Ltd · Editor, Keys & Coffee

Shivam Kaushik is the founder of QuibbleTech Solutions Pvt Ltd and the editor of Keys & Coffee. He is not a licensed loan officer or financial adviser. Every guide here is written in plain English and checked against official sources such as the CFPB, HUD, Fannie Mae, Freddie Mac and the Federal Reserve. For advice on your own loan, talk to a licensed lender.

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Keys & Coffee is an independent education site. We are not a lender or mortgage broker, we do not take loan applications or payments, and nothing here is financial advice. This site is not affiliated with Axia Home Loans, Axia Financial, LLC, or Planet Home Lending. Rates and rules change often — always confirm details with a licensed loan officer and check any lender on the NMLS Consumer Access site.