FHA Mortgage Insurance Costs

FHA requires a mortgage insurance premium (MIP) for its homebuying programs. An upfront premium of 1.00% of the loan amount is paid at closing and can be financed into the mortgage amount. In addition, for FHA traditional purchase and refinance products, the annual premium, shown in basis points below, will be paid on a monthly basis, and will be charged based on the initial loan-to-value ratio and length of the mortgage according to the following schedule:


Loans longer than 15 years


Annual Premiums

Less than 95%

85 BPS**

Greater than 95%

90 BPS**

Loans shorter than 15 years


Annual Premiums

90% or Less


Greater than 90%

25 BPS**

*LTV - Loan-to-value
**BPS - Basis points, 1/100th of 1%