From the RatesQ team · Sample question

What does FHA mortgage insurance (MIP) actually cost?

This educational scenario and its sample explanations are not posts from real users.

I know FHA loans have MIP but I don't understand the math. My loan would be around $320,000. What's the upfront cost and what's the monthly hit?

Quick Summary

  1. FHA mortgage insurance can include upfront and annual premiums.
  2. The annual premium and its duration depend on the applicable loan terms.
  3. Include financed upfront premiums and monthly insurance when comparing costs.

Sample explanations

From the RatesQ team

Concrete math for your $320k loan: UFMIP = 1.75% × $320,000 = $5,600. This gets rolled into the loan so your actual loan balance becomes $325,600. Monthly MIP: $325,600 × 0.55% / 12 = about $149/month. This continues for the full 30-year term if you put less than 10% down, or 11 years if you put 10% or more down. The 0.55% annual rate applies to most standard 30-year FHA loans — it was reduced from 0.85% in March 2023 which made FHA significantly more competitive.

From the RatesQ team

Don't forget MIP also applies to refinances — if you do an FHA streamline later, you're starting a new MIP period. Something to factor in when comparing whether FHA or conventional makes more long-term sense for your situation.