A worked example
A $400,000 home with the FHA minimum 3.5% down has a $386,000 base loan, plus a $6,755 upfront MIP rolled in. At 6.5% over 30 years, principal and interest run about $2,482 a month, plus roughly $177 in monthly MIP at the standard 0.55% annual rate — about $2,659 total.
Frequently asked questions
Why does FHA insurance apply even with a bigger down payment?
Unlike conventional PMI, which disappears once you put down 20%, FHA mortgage insurance is required on every FHA loan regardless of down payment size — the down payment only affects how long you're required to keep paying it, and the rate tier you fall into.
How do I get rid of FHA MIP?
With less than 10% down, MIP lasts for the life of the loan — the standard way out is refinancing into a conventional loan once you've built up enough equity (typically 20%). With 10% or more down, MIP automatically drops off after 11 years.
Why is the upfront MIP added to my loan balance?
Most borrowers finance the 1.75% upfront premium directly into the loan rather than paying it in cash at closing — convenient, but it means you pay interest on that premium for the life of the loan too.
This calculator provides estimates for general informational purposes only and is not financial advice. MIP rates reflect 2026 HUD guidelines and may change.