Mortgage insurance guide
FHA mortgage insurance (MIP) vs. conventional PMI
Compare how FHA mortgage insurance premiums and conventional private mortgage insurance differ, what to check in written loan offers, and where cancellation rules vary.
Short answer: what is the difference between FHA MIP and conventional PMI?
FHA mortgage insurance premiums (MIP) apply to FHA-insured loans; conventional loans may have private mortgage insurance (PMI) depending on the loan and down payment. FHA MIP commonly has an upfront premium and an annual premium generally collected in monthly installments for most forward mortgage programs. Conventional PMI is private insurance, and covered loans may have federal cancellation and termination protections. The products use different eligibility, pricing, and ending rules, so compare actual written offers rather than assuming one is always cheaper. Reviewed November 3, 2026.
Can I cancel FHA MIP at 80% loan-to-value like conventional PMI?
Do not assume so. The CFPB says the Homeowners Protection Act cancellation rules it describes apply to many single-family principal-residence mortgages, while FHA and VA loans have different requirements. For FHA loans, HUD policy sets MIP duration based on loan characteristics such as term and original loan-to-value, and current case rules should be checked in Handbook 4000.1. Ask the servicer whether your loan has an MIP end date and what conditions apply.
How should I compare the cost of two offers?
Request comparable Loan Estimates for the same purchase price, down payment, loan amount, loan term, rate-lock period, and expected time in the home. Compare the interest rate and principal-and-interest payment, any FHA upfront MIP and whether it is financed, recurring monthly insurance, lender fees, cash to close, and the expected insurance duration. Also compare the loan balance and total costs over a time period that matters to you. Premiums depend on program and loan details; this guide does not calculate a quote or predict approval.
Does the lowest monthly payment identify the cheaper loan?
No. An upfront premium financed into an FHA loan increases the amount borrowed, while a recurring premium can continue for different periods under FHA and conventional rules. A lower payment can also reflect a longer term or different rate. Use the official Loan Estimate and Closing Disclosure to compare upfront and recurring costs, then ask each lender to explain any assumptions or fees.
What can I verify after closing?
Check your closing documents and mortgage statements to identify the loan program and insurance charge. For many covered conventional loans, the CFPB describes a written request at the scheduled 80% original-value point, automatic termination generally at the scheduled 78% point if payments are current, and termination after the midpoint of the original amortization term if PMI remains. FHA and VA loans follow different requirements. If you are unsure which insurance you have, ask the servicer before using the conventional PMI cancellation checker.
Sources
- HUD: FHA Single Family Housing Policy Handbook 4000.1 (HUD lists an update published August 12, 2026; checked November 3, 2026)
- HUD: FHA mortgage insurance premium structure for forward mortgage loans (program structure and premium factors; checked November 3, 2026)
- CFPB: FHA loans (insurance requirement and comparing FHA with conventional offers; checked November 3, 2026)
- CFPB: When can I remove private mortgage insurance (PMI) from my loan? (last reviewed August 28, 2026)
- CFPB: Compare official Loan Estimates (checked November 3, 2026)