The mortgage insurance required on FHA loans — includes an upfront premium (1.75%) and an annual premium paid monthly.
Full Definition
MIP is the FHA-specific equivalent of PMI. Unlike conventional PMI, FHA MIP includes two components: an upfront MIP of 1.75% of the loan amount paid at closing (or financed into the loan), and an annual MIP ranging from 0.15–0.75% depending on loan size, term, and LTV — paid monthly as part of your payment. On most FHA loans with less than 10% down, MIP is required for the full loan term. With 10%+ down, MIP cancels after 11 years. For FHA loans originated in recent years, there's no LTV-based automatic cancellation (unlike conventional PMI) — one reason borrowers with improved equity often refinance out of FHA into a conventional loan.
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