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FHA MIP Removal Calculator

My FHA MIP removal calculator does exactly what it says. Calculate when your FHA loan’s annual mortgage insurance is removed.

For most homeowners, it actually remains in place for the life of the loan, the entire 30 years if you go with a 30-year fixed.

The exception is those who put down at least 10%, which sadly isn’t many folks who go the FHA route.

That’s because the 3.5% down payment is one of the main draws of the program, not to mention the liberal credit score requirements.

This tool goes a bit further though by allowing you to compare staying with your FHA loan versus refinancing into a conventional loan and perhaps getting rid of mortgage insurance at the same time.

FHA MIP Removal & Refinance Calculator

Find out whether your FHA mortgage insurance ever cancels on its own, and compare staying with your FHA loan versus refinancing to a conventional loan to get rid of it.

Your FHA Loan

$
$
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Needed to find your current balance & MIP status
Financed into loan
Toggle off if you paid it in cash at closing

Refinance to Conventional Alternative

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%
$
Typically $3,000–$5,000
Only used if you’d still owe PMI on the new loan
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Only applies if your new LTV is above 80%

Full Comparison

Total Monthly Payment Over Time

Amortization Schedule

Disclaimer: This calculator is for informational and educational purposes only and does not constitute financial, legal, or tax advice. It reflects FHA mortgage insurance rules for loans endorsed on or after June 3, 2013 (per HUD Mortgagee Letter 2023-05): annual MIP cancels automatically after 11 years if your down payment was 10% or more at origination, and lasts for the life of the loan otherwise, with refinancing to a conventional loan as the only other way to remove it. Loans endorsed before June 3, 2013 follow older rules (generally, automatic cancellation at 78% LTV) not modeled here. Annual MIP is not a flat dollar amount for the life of the loan — per HUD’s published calculation method, each 12-month period is based on that year’s average outstanding balance (the beginning-of-month balance across the original amortization schedule), so your MIP payment steps down slightly every year, which this calculator reflects. It does not model the additional adjustment HUD’s method applies when upfront MIP is financed (dividing the annual premium by one plus the upfront MIP factor), which would very slightly lower the figures shown if upfront MIP was financed. Annual MIP rates shown reflect the standard loan-amount tier only; loans above your area’s FHA loan limit (“high-balance” loans) carry different, higher rates not modeled here. The new conventional loan’s PMI rate is estimated using published rate cards from four insurers (MGIC, Radian, Enact, Arch Mortgage Insurance) and only applies if your new loan-to-value is above 80%; actual rates vary by insurer and are confirmed on your Loan Estimate. This calculator assumes you refinance for your current balance only and does not model rolling closing costs into the new loan. Figures are principal, interest, and mortgage insurance only and do not include taxes, homeowners insurance, or HOA dues. Consult a licensed mortgage professional for your exact terms.

When Does the FHA Mortgage Insurance Go Away?

As noted, unless you put down 10% or more, your mortgage insurance doesn’t go away unless you pay off the FHA loan in full.

Even if you do put 10% or more down, the insurance remains in place for a lengthy 11 years.

This wasn’t always the case, but after the big housing crash in the early 2000s, changes were implemented to ensure the FHA loan program could keep running smoothly.

That means collecting an annual mortgage insurance premium (MIP), collected monthly, from FHA borrowers for the life of the loan.

To make matters worse, this is the case even if you pay down your loan to 80% loan-to-value (LTV) or less.

So there’s no way to get out of it early by making extra mortgage payments, nor is there a way to request cancellation once you reach 80% LTV like there is with a conventional home loan.

The only way to get rid of MIP for good is to refinance the loan. A popular option is the FHA-to-conventional refinance.

[Searching for a home loan? See your options with dozens of lenders fast.]

But this only makes sense if the new mortgage rate and lack of MIP make the cost of the refinance worth your while.

You also have to consider the loan term on the new mortgage to determine if you’re resetting the clock by adding a lot more years to the loan.

Refinance to Conventional Loan Alternative

This calculator allows you to run a refinance simulator to determine if exiting your FHA loan early makes sense.

All you need to input is the current property value (best guess), the new mortgage rate, loan term, and any applicable closing costs.

Those seeking out a no cost refinance can put $0 that field.

If the LTV is determined to be over 80% still, PMI will be required and it will auto-calculate that as well.

In a perfect world, you’d want to refinance out of the FHA and into a conventional loan with an LTV of 80% or less to drop mortgage insurance entirely.

Especially if you could snag an even lower mortgage rate in the process. That’d be a win-win with no MIP and a lower interest rate, resulting in a significantly lower monthly payment.

Just remember the new loan term could result in more interest paid over the life of the old loan and new loan, assuming it’s kept to maturity.

But for most homeowners, it’s simply about getting a lower monthly mortgage payment.

Read on: FHA vs. conventional loan pros and cons

Colin Robertson
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