FHA MIP Removal Calculator

How FHA MIP Removal Actually Works in 2026

FHA mortgage insurance premium (MIP) is a monthly fee — typically 0.55% to 0.85% of the loan balance per year — that all FHA borrowers pay regardless of equity position. Unlike conventional PMI, MIP usually cannot simply be cancelled once you reach 20% equity. The rules depend on when you took out the loan and how much you put down, per HUD's official MIP cancellation policy (source: hud.gov).

For FHA loans originated on or after June 3, 2013 (most current borrowers): if your original down payment was less than 10%, MIP is required for the life of the loan. If you put 10% or more down, MIP drops automatically after 11 years. For loans before June 2013, the older rules apply — MIP cancels once the loan reaches 78% LTV based on the original purchase price.

The Conventional Refinance Workaround

Because most modern FHA borrowers cannot simply drop MIP through cancellation, the standard play is to refinance into a conventional loan once your equity exceeds 20% of current home value. Conventional loans use private mortgage insurance (PMI), which automatically cancels at 78% LTV per the Homeowners Protection Act of 1998 — and you can request cancellation at 80% LTV with a current appraisal.

If your home has appreciated significantly since purchase, you may already have 20%+ equity even if you started with 3.5% FHA down. This calculator estimates whether refinancing to conventional saves money after closing costs, factoring in the rate difference and the freed-up MIP payment. Note that conventional refinance rates are typically 0.125-0.375% higher than FHA rates per Freddie Mac PMMS averages (source: freddiemac.com/pmms), so the savings come primarily from removing MIP, not the rate change.

2026 FHA MIP Rates and Recent Changes

HUD reduced annual MIP rates by 0.30 percentage points in March 2023 — a change that remains in effect for 2026. For most 30-year FHA loans, annual MIP is currently 0.55% (down from 0.85%) for loans with LTV over 95% and 0.50% for LTV under 95%. The upfront MIP fee remains 1.75% of the loan amount, typically rolled into the loan balance.

For borrowers with FHA loans originated 2018-2022 at higher MIP rates, the 2023 reduction has not been retroactively applied. The only way to capture the lower rate is to refinance — either via FHA-to-FHA streamline (still keeps MIP) or FHA-to-conventional (removes MIP entirely if equity allows). Use our FHA streamline refinance calculator for the same-program option, or our refinance savings calculator for the conventional comparison.

When MIP Removal Saves the Most Money

The math favors conventional refinancing when: (1) home value has risen so current LTV is under 80%, (2) credit score is 740+ to qualify for the best conventional rates, (3) you plan to stay in the home at least 3-4 years past the break-even point, and (4) MIP payment is large relative to the rate-difference cost. For a typical $250,000 FHA loan with $175 monthly MIP at 6.5%, refinancing to a 6.75% conventional saves around $130-150 per month after the slightly higher conventional rate, with break-even around month 30-40 on $5,500 closing costs.

If you do not yet have 20% equity and your loan is from before June 2013, you may qualify for MIP cancellation at 78% LTV without refinancing — see our PMI vs FHA MIP comparison for the year-by-year rules. Use our refinance savings calculator to validate the conventional path.

Last updated April 2026. Sources: hud.gov MIP rules, freddiemac.com PMMS, cfpb.gov.