What this calculator does
It works out both mortgage insurance premiums on an FHA loan: the upfront premium charged once at closing, and the annual premium that is split into monthly installments and added to your payment.
FHA loans are insured by the Federal Housing Administration, part of the U.S. Department of Housing and Urban Development (HUD). The insurance protects the lender; the borrower pays for it through mortgage insurance premiums, or MIP.
The upfront MIP (UFMIP) is a one-time charge of 1.75% of the base loan amount. The annual MIP is a yearly rate from HUD's table, applied to the balance and collected monthly. Its rate depends on the term, the loan-to-value ratio (LTV: the loan as a share of the home's value) and the size of the base loan. The results show the first year's monthly premium, how long it lasts and every year's amount.
How the math works
The upfront premium
Upfront MIP is the base loan amount × 1.75%. The base loan amount is the price minus your down payment. If you finance the premium, it is added on top, and principal and interest are figured on the larger total.
The annual premium rate
For a base loan amount of $726,200 or less, HUD's table has these rows. Term of more than 15 years:
| LTV | Annual MIP | Charged for |
|---|---|---|
| 90% or less | 0.5% | 11 years |
| Over 90% to 95% | 0.5% | Mortgage term |
| Over 95% | 0.55% | Mortgage term |
Term of 15 years or less:
| LTV | Annual MIP | Charged for |
|---|---|---|
| 90% or less | 0.15% | 11 years |
| Over 90% | 0.4% | Mortgage term |
The LTV that picks your row is the base loan amount divided by the property's value, so a financed upfront premium does not move you into a higher band. HUD's value is generally the lower of the purchase price and the appraised value; this calculator uses the price.
The last column is how long the premium is charged: 11 years at an LTV of 90% or less, otherwise the mortgage term. Conventional private mortgage insurance (PMI) works differently: federal law generally ends it once the balance is scheduled to reach 78% of the original value (see the PMI removal calculator). FHA's annual MIP has no 78% cutoff.
From the annual rate to a monthly premium
HUD publishes these steps:
- Average the 12 scheduled balances for the loan year, from the original amortization schedule (the payment plan set when the loan starts).
- Multiply by the annual MIP rate.
- If the upfront premium was financed, divide by 1 plus the upfront rate (1.0175).
- Divide by 12.
- M
- monthly MIP for that loan year
- B
- average scheduled balance for the year, from the original amortization schedule
- a
- annual MIP rate from the table as a decimal (0.55% → 0.0055)
- u
- upfront MIP rate as a decimal (1.75% → 0.0175) when it is financed; 0 when it is paid at closing
Each step is rounded to the cent and repeated for every year the premium is charged. As the scheduled balance falls, so does the monthly MIP.
Worked example
Take a $300,000 home with $10,500 down, a 6% rate, a 30-year term and the upfront premium added to the loan.
Worked example
- Base loan amount: $300,000 − $10,500 = $289,500. LTV for MIP: $289,500 ÷ $300,000 = 96.5%.
- Upfront MIP: $289,500 × 1.75% = $5,066.25. Financed, the total loan is $294,566.25, and principal and interest come to $1,766.07 a month.
- Table row: a term of more than 15 years and an LTV over 95% gives 0.55% a year, charged for the life of the loan.
- Year 1 average scheduled balance of the whole loan, including the financed premium: $292,926.25. × 0.0055 = $1,611.09. ÷ 1.0175 = $1,583.38. ÷ 12 = $131.95.
Monthly MIP in year 1: $131.95, for a first-year payment of $1,898.02 before taxes and insurance. Over the 30 years, annual MIP adds up to $30,741, on top of the $5,066.25 upfront premium.
With $30,000 down, the LTV is exactly 90%, the lowest band: 0.5%, charged for 11 years, starting at $111.87 a month and totaling $13,633. On a 15-year term with that down payment, the rate is 0.15%: $33.10 a month in year 1, charged for 11 years.
Common mistakes
- Measuring LTV on the total loan. The band comes from the base loan amount. Adding a financed premium first can push a loan sitting exactly at 90% over the line, changing the duration from 11 years to the full term.
- Expecting MIP to end at 78%. That rule belongs to conventional PMI. FHA's annual premium lasts 11 years or the mortgage term, set by the LTV at the start.
- Overlooking the 15-year line. Terms of 15 years or less have their own table. A 16-year term is priced like a 30-year one.
- Treating the monthly MIP as fixed. It follows each year's average scheduled balance, so it drops a little every loan year. Year 1 is the highest.
- Forgetting what financing the premium costs. Nothing is due for it at closing, but you pay interest on it for the life of the loan.
Limits of this estimate
- Annual MIP is estimated only for a base loan amount of $726,200 or less. HUD's table prints that threshold; Mortgagee Letter 2023-05 describes it as the national conforming loan limit, which changes over time.
- Programs with different premium rules are not covered: Streamline and Simple Refinance mortgages used to refinance an FHA mortgage endorsed on or before May 31, 2009; Hawaiian Home Lands (Section 247); Indian Lands (Section 248); and reverse mortgages (Home Equity Conversion Mortgages, or HECMs).
- The price stands in for the property value; a lower appraisal raises HUD's LTV.
- HUD's calculation page illustrates its steps with an older set of premium rates; this calculator applies the same steps to the table above. Your lender's figures are the final word.
- The payment shown is principal, interest and MIP only, with no tax, insurance or HOA dues.
Frequently asked questions
What is the difference between upfront MIP and annual MIP?
Upfront MIP is a one-time 1.75% of the base loan amount, paid at closing or financed. Annual MIP is a yearly rate on each loan year's average scheduled balance, collected monthly.
How long do I pay FHA annual MIP?
It depends on the LTV when the loan starts: 11 years at 90% or less, otherwise the mortgage term. The calculator shows which applies next to the rate.
Does FHA mortgage insurance drop off at 78% like PMI?
No. Automatic cancellation at 78% of the original value comes from the federal law on private mortgage insurance for conventional loans; the PMI removal calculator finds that month. FHA's annual MIP follows the duration in HUD's table instead.
Does financing the upfront premium raise the monthly MIP?
Not in HUD's method. Step 3 divides by 1.0175 when the premium is financed, which takes it back out. In the worked example, year-1 MIP is $131.95 financed and $131.95 paid in cash. Financing does raise principal and interest, from $1,735.70 to $1,766.07.
Is MIP different on a 15-year FHA loan?
Yes. Terms of 15 years or less use their own table: 0.15% at 90% or less, 0.4% at over 90%. Longer terms use 0.5% at 90% or less, 0.5% at over 90% to 95%, 0.55% at over 95%.
Why might my lender's MIP differ from this estimate?
Usually because the appraisal came in below the price, the base loan amount is above HUD's table threshold, or the loan falls under different premium rules. Your Loan Estimate and Closing Disclosure show the premiums that apply.
Sources
The premium rates on this page come from HUD's published schedule for FHA forward mortgages. Rates last verified: October 5, 2026. If this page and HUD's documents ever disagree, HUD's documents govern.
Next steps: the mortgage payment calculator adds property tax, insurance and HOA dues to principal and interest. If you plan to pay the upfront premium at closing, the cash to close calculator totals what you bring on closing day. For a VA loan on the same home, the VA funding fee calculator shows VA's one-time charge.