PMI vs FHA MIP Comparison Calculator 2026

What Is PMI vs FHA MIP?

Private Mortgage Insurance (PMI) and FHA Mortgage Insurance Premium (MIP) are two different mortgage insurance products that protect the lender — not the borrower — when a homebuyer puts less than 20% down. PMI applies to conventional loans (those backed by Fannie Mae or Freddie Mac); MIP applies to FHA loans (insured by the Federal Housing Administration). The two are priced and structured very differently, and the cheaper option depends almost entirely on your credit score, down payment, and loan duration. Source: CFPB Owning a Home.

This calculator runs both scenarios with identical purchase price, down payment, and rate, then sums the lifetime mortgage insurance cost — including FHA's 1.75% upfront UFMIP — and tells you which is cheaper. The dominant factor is usually your FICO score: above ~720, conventional PMI is almost always cheaper; below ~680, FHA MIP often wins despite the upfront fee.

How PMI Is Priced and Cancelled

Conventional PMI premiums in 2026 typically range from 0.46% to 1.50% per year of the loan balance, set by a matrix combining FICO score and loan-to-value (LTV) ratio. A 760+ borrower at 90% LTV may pay only 0.30%–0.40% annually, while a 660 borrower at 95% LTV could pay 1.20%–1.50%. PMI is paid monthly as part of the mortgage payment.

Two cancellation paths exist under the federal Homeowners Protection Act of 1998: (1) automatic termination when the loan reaches 78% LTV based on the original amortization schedule (no request needed); and (2) borrower-requested cancellation at 80% LTV with a written request to the servicer. Both are based on the original property value, not market value, so home appreciation does not accelerate cancellation under HPA — though some servicers will accept an appraisal-based early cancellation under their own policy.

How FHA MIP Is Priced and Cancelled

FHA mortgage insurance has two parts. The Upfront MIP (UFMIP) is 1.75% of the base loan amount, paid at closing or financed into the loan principal — most borrowers finance it. The annual MIP, paid monthly, is set by HUD Mortgagee Letter and depends on the loan term and LTV. For 30-year loans, annual MIP is currently 0.55% (LTV ≤ 95%) or 0.55%–0.85% (LTV > 95%) under the 2023 reduction; for ≤15-year loans, it ranges 0.15%–0.40%. Verify final 2026 rates against the latest HUD Mortgagee Letter.

Critically, FHA MIP cannot auto-cancel like PMI on most loans originated after June 3, 2013. If your initial down payment is less than 10% (LTV > 90%), MIP runs the entire loan term — 30 years on a 30-year loan, no exit. With ≥10% down, MIP automatically ends after 11 years. The only way to drop MIP early is to refinance into a conventional loan once you reach 20% equity. This is why FHA loans look cheap upfront for low-FICO borrowers but can become more expensive than conventional + PMI by year 10–15 if you stay in the home.

When Conventional Wins vs When FHA Wins

Rule of thumb based on 2026 pricing: conventional + PMI is cheaper when your FICO is 720+ and you can put 5%+ down. FHA wins when your FICO is below 680, your DTI is tight, or you're buying with high seller concessions (FHA allows up to 6% seller concession vs conventional's 3% at <90% LTV). For borrowers in the 680–720 range, the math depends on how long you'll keep the loan: shorter holds favor FHA (lower monthly payment), longer holds (10+ years) favor conventional because PMI eventually drops off. The calculator above does the full 30-year sum so you don't have to guess.

This tool is an estimate. Actual PMI and MIP quotes will vary by lender, MI provider, and the specific Fannie/Freddie LLPA in effect at lock. Use it to narrow your shortlist before you start collecting Loan Estimates. Last updated: May 3, 2026.