PMI vs MIP Comparison Calculator
Compare Private Mortgage Insurance (PMI) on conventional loans vs Mortgage Insurance Premium (MIP) on FHA loans. Same idea — different rules. The lifetime cost difference can hit $20K-$50K+.
PMI vs MIP — Key Differences
Conventional PMI: Required when down payment <20%. Cost: 0.3-1.5% of loan annually (depends on credit score and LTV). Removable at 80% LTV by request, automatic at 78%. Average duration on loan: 6-15 years. MIP (FHA): Required on all FHA loans. Two parts: Upfront MIP 1.75% of loan amount + Annual MIP 0.45-0.85% of balance. With <10% down, MIP for LIFE of loan. With 10%+ down, MIP for 11 years.
Real Cost Comparison
$350K loan, 5% down ($17,500). Conventional 30-year at 7.0%: $2,800 PMI/year × 7 years until 80% LTV = $19,600. FHA 30-year at 6.75% (FHA usually slightly lower rate): $6,125 UPMIP + $2,700 annual × 30 years = $87,125. FHA total = $87K vs Conventional $20K. Difference: $67K over loan life. FHA's main advantage: down payment 3.5% (vs 5% conventional min), more lenient credit (580+ vs 620+).
When FHA Beats Conventional
(1) Credit score 580-660: FHA pricing significantly better — conventional PMI quote at 660 credit is brutally expensive. (2) Down payment 3.5% but not 5%: FHA only option. (3) High debt-to-income (45-50%): FHA more flexible. (4) Past credit issues: FHA looks back 2 years for bankruptcy, 3 for foreclosure (conventional 4+/7+). For these scenarios, FHA cheaper upfront despite lifetime MIP cost — buyer wouldn't qualify for conventional anyway.
Strategy: FHA Now, Refinance Later
Common play: take FHA loan today, pay MIP, refinance to conventional when (a) Credit improves to 660+, AND (b) Loan-to-value drops below 80% (via payments + appreciation). Refinancing eliminates MIP. Net result: get FHA's lenient qualification today, escape lifetime MIP via refi in 3-5 years. Works in flat/rising market; fails if rates spike and refi cost exceeds savings. Always model refi breakeven before assuming this path.
PMI vs MIP Comparison Calculator: 2026 Numbers After the FHA MIP Cut
The PMI vs MIP comparison calculator above uses the post-March 2023 FHA annual MIP rates (lowered 30 bps to 0.55% on most 30-year >95% LTV loans per FHA Mortgagee Letter 2023-02), which materially changes the break-even vs conventional PMI in 2026 — the spread is roughly $1,250/year on a $400K loan instead of $2,400/year pre-2023. Conventional PMI rates are CFPB-tracked at 0.3%–1.5% of loan depending on credit + LTV; pull a real PMI quote from your lender (LPI factor) before assuming the rack rate.
When Conventional PMI Beats FHA MIP (Even at Low Down)
If your credit score is 720+ AND you can stretch to 5% down, conventional almost always wins in 2026 — Fannie Mae's PMI factor at 720+ credit on 95% LTV runs ~0.55%, which roughly equals current FHA annual MIP but is REMOVABLE at 80% LTV under the Homeowners Protection Act. FHA MIP at <10% down stays for the life of the loan. The PMI vs MIP comparison calculator flips conventional-favored at roughly 720 credit + 5% down + 7-year hold; FHA-favored at credit <680 OR 3.5% down. Run yours at the exact credit/down combo — the gray-zone is narrower than most blog posts suggest.
Sources: HUD FHA Mortgagee Letter 2023-02, CFPB Conventional Loans Guide, HUD FHA Handbook 4000.1. Last updated 2026-06-30.
Frequently Asked Questions
PMI vs MIP — what's the difference?
PMI: conventional loan insurance, removable at 80% LTV. MIP: FHA loan insurance, includes upfront 1.75% + annual. With <10% down, MIP for LIFE of loan.
Why is FHA MIP for life?
Since 2013, FHA charges MIP for life of loan if down payment <10%. Escape only via refinance to conventional. FHA's trade-off for low down payment + lenient credit.
When does FHA beat conventional?
Credit 580-660 (conventional PMI brutally priced), down payment 3.5%, high DTI (45-50%), past credit issues 2-4 years old. For these scenarios, FHA only realistic option.
Should I refinance from FHA?
Yes when (1) Credit improves to 660+, AND (2) LTV drops below 80%. Refinance to conventional eliminates MIP. Model breakeven on closing costs before refinancing.
Is this tool free?
Yes. 100% free, no sign-up. All math runs in your browser — your loan data never leaves your device.
PMI vs MIP comparison calculator — does it use 2026 FHA rates?
Yes. FHA annual MIP defaults to 0.55% for the standard 30-year 95%+ LTV case after the March 2023 30-bps cut (HUD ML 2023-02). Override the field if your scenario is <15-year, <95% LTV, or non-standard. UPMIP stays at 1.75% — unchanged since 2013.
Should the conventional PMI input be the monthly or annual rate?
Annual rate, as a percent of original loan amount. Lender LPI quotes commonly come as monthly $ — multiply by 12 then divide by loan amount and multiply by 100 to convert. A $190/mo PMI on a $342K loan = $2,280/yr = 0.667% annual. Plug 0.667 in.
Why does the calculator output 'Conventional wins' even at 5% down?
Because conventional PMI is removable at 78% LTV (auto) or 80% LTV (request) under the Homeowners Protection Act, while FHA MIP stays for the loan life at <10% down. Even if FHA's monthly is lower today, conventional's total-cost win compounds over 6–10 years. The calculator includes that PMI-removal timing.