FHA MIP Rates 2026: Current Rates, Cancellation Rules, and What Changed in 2023

FHA mortgage insurance has two components: an upfront premium paid at closing and an annual premium assessed monthly. Both are required on virtually all FHA loans regardless of down payment. Understanding the current rates and cancellation rules is baseline knowledge for any MLO originating FHA business.

Upfront MIP

The upfront mortgage insurance premium is 1.75% of the base loan amount. It is almost universally financed into the loan rather than paid in cash at closing. A $300,000 FHA loan carries $5,250 in UFMIP rolled into the loan balance, bringing the total financed to $305,250.

Annual MIP Rates (Current as of 2026)

• ✦30-year term, LTV above 95%: 0.55% annually (reduced from 0.85% effective March 20, 2023)
• ✦30-year term, LTV 90.01% to 95%: 0.50% annually
• ✦30-year term, LTV at or below 90%: 0.50% annually; cancels after 11 years
• ✦15-year term, LTV above 90%: 0.40% annually
• ✦15-year term, LTV at or below 90%: 0.15% annually

MIP Cancellation Rules

For 30-year FHA loans with an original LTV above 90%: annual MIP runs for the life of the loan. There is no automatic cancellation at 80% LTV the way conventional PMI works. The only exit is refinancing to a conventional loan once enough equity accumulates. For 30-year loans with an original LTV at or below 90%: MIP cancels at year 11. For 15-year loans: MIP cancels when LTV reaches 78%, regardless of time.

Impact of the 2023 Rate Reduction

HUD reduced the standard annual MIP from 0.85% to 0.55% effective March 20, 2023 via Mortgagee Letter 2023-05. On a $300,000 30-year FHA loan, this reduced the monthly MIP payment by approximately $75 per month. Borrowers with FHA loans originated before March 2023 did not benefit from the reduction; only new loans closed after that date carry the lower rate.