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PMI vs MIP: Mortgage Insurance Differences

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How conventional PMI differs from FHA MIP, including premiums and when each one can end.

Published: 2026-10-12

Key takeaways

  • The CFPB says PMI is often required on a conventional loan with less than 20 percent down. It protects the lender if you stop paying. You can still lose the home.
  • On many conventional loans closed on or after July 29, 1999, you can ask to cancel PMI at 80 percent of original value. It must end on its own at 78 percent if you are current.
  • FHA charges 1.75 percent upfront on most forward loans, plus a monthly annual premium.
  • For many FHA loans endorsed on or after March 20, 2023, annual MIP lasts 11 years at 90 percent loan-to-value or below, and for the life of the loan above that.

Published: 2026-10-12

Private mortgage insurance and FHA mortgage insurance both cover the lender, not you. The premiums and the stop dates are different.

PMI is the private policy on many conventional loans with a small down payment. MIP is the premium on an FHA-insured loan. Read the FHA loan guide beside this page, and sketch the conventional premium in the PMI calculator.

What is PMI, and when does it end?

Private mortgage insurance (PMI) is a policy the lender arranges with a private insurer. The Consumer Financial Protection Bureau (CFPB) says you might have to buy it on a conventional loan if your down payment is under 20 percent of the purchase price. The same idea applies when you refinance a conventional loan with less than 20 percent equity. The policy insures the lender against loss if you do not pay. It does not insure you, and foreclosure is still possible if you fall behind.

Most borrowers pay PMI monthly, added to the mortgage payment and shown in Projected Payments on the Loan Estimate. Some pay one upfront premium at closing. Some pay both. An upfront premium is not always refunded if you move or refinance. The insurer sets the price from credit, loan-to-value, and coverage. This page does not quote a PMI rate.

Cancellation rights for many single-family primary homes apply to mortgages closed on or after July 29, 1999. The CFPB summarizes them this way.

You can ask the servicer, in writing, to cancel PMI when the balance is scheduled to reach 80 percent of original value, or sooner if extra payments get the balance there. Original value is generally the lower of the contract price and the value at purchase, or the appraisal from a later refinance. The servicer must cancel if you are current, your payment history qualifies, you certify there is no junior lien, and, if asked, you show the value has not fallen below that original value.

If you never ask, PMI still ends when the balance is scheduled to reach 78 percent of original value, provided you are current. It also ends the month after the midpoint of the schedule. On a 30-year loan that is year 15, even if the balance is still above 78 percent.

Fannie Mae and Freddie Mac can allow earlier cancellation based on current value. Their rules cannot be worse for you than these minimums. FHA and VA loans do not use this PMI schedule. The how to remove PMI guide covers the request itself.

What is FHA MIP, and how is it charged?

FHA mortgage insurance premium (MIP) is part of the insurance on an FHA loan. HUD's Mortgagee Letter 2023-05 sets the premiums for most forward mortgages endorsed on or after March 20, 2023.

The upfront premium is 1.75 percent of the base loan amount. Borrowers often finance it into the loan. Some refinances of FHA loans endorsed on or before May 31, 2009 are charged a different upfront amount, and Section 248 Indian Lands loans are not charged one.

The annual premium is collected monthly on top of that. For a term longer than 15 years and a base loan amount of $726,200 or less, the letter sets annual MIP at:

  • 50 basis points (0.50 percent) a year when the loan-to-value is 90 percent or below, lasting 11 years.
  • 50 basis points a year when the loan-to-value is above 90 percent and up to 95 percent, lasting for the mortgage term.
  • 55 basis points (0.55 percent) a year when the loan-to-value is above 95 percent, lasting for the mortgage term.

Loans above that base-loan threshold, and loans of 15 years or less, use other rates and durations in the same letter. The figures above are the common longer-term case, not every FHA loan.

On these longer loans, a loan-to-value of 90 percent or below is what swaps life-of-loan annual MIP for the 11-year schedule. The FHA loan guide covers the rest of the FHA structure.

How do the two premiums compare?

PMI is private insurance on a conventional loan, usually paid monthly. You can request cancellation at 80 percent of original value, and it ends on its own at 78 percent if you are current. Fannie Mae or Freddie Mac may let you ask sooner with a new appraisal.

MIP is FHA insurance. Most forward loans charge 1.75 percent upfront plus an annual premium set by term, loan amount, and loan-to-value. On the common longer-term loan endorsed on or after March 20, 2023, annual MIP lasts 11 years at 90 percent loan-to-value or below, and for the life of the loan above that. Paying the balance down later does not, under that letter, shorten a life-of-loan premium. Duration follows the original loan-to-value.

Neither premium protects you from foreclosure. A larger conventional down payment can avoid PMI. A small-down-payment FHA loan can carry annual MIP for as long as you keep that loan. Leaving it later means a new refinance application, not an automatic drop-off.

IRS Publication 936 says the itemized deduction for mortgage insurance premiums has expired and you can no longer claim it. The PMI tax page explains how this site treats that rule. Confirm the year you are filing before you take a deduction.

Which comparison should you run?

Estimate conventional PMI in the PMI calculator and the full payment in the mortgage calculator. Count the FHA upfront 1.75 percent plus the annual premium for your term and loan-to-value. Above 90 percent on a term over 15 years, assume that annual premium lasts the life of the loan unless you refinance or pay it off.

Compare cash to close and how long you expect to keep the loan. The loan types guide is the wider map. Nothing here says which loan a lender will approve.

Compare a conventional premium in the PMI calculator and read the FHA loan guide before you decide which structure to price with a lender.

Upfront mortgage insurance is also a closing cost. See Closing Costs: Who Pays What When You Buy.

This article is educational and is not a loan offer or financial advice.

Sources

Frequently asked questions

Does PMI protect me if I lose my job?

No. The CFPB says PMI protects the lender if you stop paying. You can still lose the home. FHA insurance protects the lender's side of the loan, not your ability to pay.

When can I cancel conventional PMI?

On many loans closed on or after July 29, 1999, you can request cancellation in writing when the balance is scheduled to reach 80 percent of original value, sooner if extra payments get you there, if you meet the payment, lien, and value tests. Automatic termination is at 78 percent if you are current.

Does FHA MIP drop off at 78 percent?

Not under Mortgagee Letter 2023-05. For terms over 15 years, annual MIP lasts 11 years at an original loan-to-value of 90 percent or below, and for the whole term if the loan-to-value is higher.

Can I deduct PMI or MIP on my taxes?

IRS Publication 936 says the itemized deduction for mortgage insurance premiums has expired. Confirm the year you are filing before you claim one.