Quick answer: FHA mortgage insurance in 2026 costs 1.75% of the loan amount once at closing (usually financed into the loan) plus 0.55% per year on most 30-year loans with 3.5% down — 0.50% with 5%+ down. With less than 10% down it lasts the life of the loan; with 10%+ down it ends after 11 years.
FHA mortgage insurance costs two things in 2026: a one-time 1.75% upfront premium, usually financed into the loan, and an annual premium of 0.55% for most 30-year loans (0.50% with 5%+ down), built into the monthly payment. Here is exactly how the premiums work, what they cost in dollars, and the three ways they go away.
Key takeaways
- FHA charges two premiums: a 1.75% upfront MIP (usually financed into the loan, per HUD) and an annual MIP of 0.55% for most 30-year loans with the minimum down payment — 0.50% if you put at least 5% down.
- HUD cut the annual premium by 30 basis points in March 2023 (most borrowers previously paid 0.85%), and the lower pricing is still in effect in 2026.
- With less than 10% down, annual MIP lasts the life of the loan; with 10%+ down it drops off automatically after 11 years. Most borrowers exit sooner by refinancing to conventional once they reach ~20% equity.
- FHA MIP is not priced by credit score — the premium is the same at 580 as at 780, which is why FHA often wins for buyers still building credit.
- FHAFHA loans in Las Vegas: the 2026 guideRequirements, limits, and the five-step path to apply.
- Plan for 1.75% once at closing (usually rolled into the loan) plus 0.55%/yr built into the monthly payment on a typical 3.5%-down 30-year FHA loan.
- On a $400,000 base loan that's roughly $183/month of MIP — an illustrative example, not a quote.
- MIP is the price of the 3.5%-down, credit-flexible FHA program; whether it beats conventional PMI depends mostly on your credit score.
What is FHA mortgage insurance?
FHA mortgage insurance premium (MIP) is the fee that funds the FHA program's guarantee. Because the Federal Housing Administration insures the lender against loss, lenders can approve buyers with as little as 3.5% down (580+ credit score) and credit profiles that conventional loans would price heavily. In exchange, every FHA borrower pays two premiums — one upfront at closing and one annually, divided into the monthly payment.
If you're comparing programs first, start with our mortgage calculators or check today's rates, then come back to the MIP math below.
How much does FHA mortgage insurance cost in 2026?
Two parts: 1.75% once, then 0.55% (or 0.50%) per year, per HUD's current premium schedule (Mortgagee Letter 2023-05, still in effect):
- Upfront MIP (UFMIP): 1.75% of the base loan amount, charged once at closing. Most borrowers finance it into the loan rather than paying cash.
- Annual MIP: 0.55% of the loan amount per year for most 30-year loans with the minimum 3.5% down, or 0.50% with at least 5% down. It's divided by 12 and added to each monthly payment.
Sources: HUD Mortgagee Letter 2023-05; HUD FHA mortgage limits, 2026.
What is the FHA MIP rate for 2026? On most 30-year FHA loans the annual MIP is 0.55% of the loan balance with under 5% down, or 0.50% with 5% or more down, plus a one-time 1.75% upfront premium. Annual MIP lasts 11 years with 10% down — otherwise the life of the loan.
The chart below is the full 2026 FHA MIP chart — every annual premium tier in HUD’s current schedule, sorted by loan term, base loan amount, and loan-to-value (LTV):
| Loan term | Base loan amount | LTV (down payment) | Annual MIP | How long it lasts |
|---|---|---|---|---|
| More than 15 years (e.g., 30- or 20-year) | At or below $832,750 | Above 95% (under 5% down) | 0.55% | Life of the loan |
| 90.01%–95% (5%–9.99% down) | 0.50% | Life of the loan | ||
| 90% or less (10%+ down) | 0.50% | 11 years | ||
| Above $832,750 | Above 95% (under 5% down) | 0.75% | Life of the loan | |
| 90.01%–95% (5%–9.99% down) | 0.70% | Life of the loan | ||
| 90% or less (10%+ down) | 0.70% | 11 years | ||
| 15 years or less | At or below $832,750 | Above 90% (under 10% down) | 0.40% | Life of the loan |
| 90% or less (10%+ down) | 0.15% | 11 years | ||
| Above $832,750 | Above 90% (under 10% down) | 0.65% | Life of the loan | |
| 78.01%–90% (10%–21.99% down) | 0.40% | 11 years | ||
| 78% or less (22%+ down) | 0.15% | 11 years |
Chart reflects HUD Mortgagee Letter 2023-05, effective for loans endorsed on or after March 20, 2023 and still in force. HUD ties the base-loan-amount tier to the national conforming loan limit; the $726,200 shown in the letter was the 2023 limit, and for 2026 that limit is $832,750. Upfront MIP is 1.75% of the base loan amount, charged once at closing. Last verified against the HUD schedule on July 24, 2026.
On a $400,000 base loan with 3.5% down:
$400,000 × 0.55% ÷ 12 ≈ $183/month of annual MIP
$400,000 × 1.75% = $7,000 upfront MIP, financed into the loan
Actual figures depend on your loan amount, down payment, and term — they become real on your Loan Estimate, not before.
Valley West takeThe MIP number that matters isn't the percentage — it's the total monthly payment, FHA vs. conventional, run the same day. FHA premiums don't rise for lower credit scores; conventional PMI does, steeply. In our experience a Las Vegas buyer in the mid-600s with 3.5%–5% down often comes out ahead with FHA even after MIP, while a 740+ buyer with 10% down almost always prices better conventional. That's a 10-minute side-by-side, not a guess.
Is the FHA upfront mortgage insurance premium (UFMIP) still 1.75% in 2026?
Yes — the FHA upfront mortgage insurance premium (UFMIP) is still 1.75 percent of the base loan amount in 2026. HUD prices it as 175 basis points. That figure comes straight from HUD Handbook 4000.1 — the rulebook for FHA mortgage insurance — which charges the same UFMIP on every amortization term. Appendix 1.0 of the handbook lists only narrow exceptions:
- Streamline or Simple refinances of FHA loans endorsed on or before May 31, 2009 — a token 0.01% instead.
- Hawaiian Home Lands loans (Section 247), which use their own premium schedule.
- Indian Lands loans (Section 248), which charge no UFMIP at all.
Everyone else pays 1.75%. HUD gives you exactly two ways to pay it. Most borrowers have the premium financed into the loan; the alternative is paying it entirely in cash at closing. There is no splitting the difference — the handbook requires one route or the other in full. Helpfully, HUD does not count a financed UFMIP against FHA loan limits or LTV caps. Rolling it in does not shrink your buying power.
Also keep annual MIP versus upfront MIP straight — both are FHA mortgage insurance, but they behave differently. The upfront premium hits once at closing. The annual premium — 0.55% or 0.50% for most 30-year loans — recurs inside every monthly payment.
The MIP refund schedule: FHA-to-FHA within three years
The upfront premium is not refundable, with one exception. Refinance your current FHA loan into another FHA loan within three years, and HUD applies a refund credit. That credit reduces the UFMIP on the new loan. An FHA-to-FHA streamline refinance is the most common way to claim it. Our FHA streamline vs. conventional guide walks through when that move makes sense. Either way, the credit only offsets the new loan’s upfront premium; HUD never pays it out as cash.
| Month of year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Year 1 | 80 | 78 | 76 | 74 | 72 | 70 | 68 | 66 | 64 | 62 | 60 | 58 |
| Year 2 | 56 | 54 | 52 | 50 | 48 | 46 | 44 | 42 | 40 | 38 | 36 | 34 |
| Year 3 | 32 | 30 | 28 | 26 | 24 | 22 | 20 | 18 | 16 | 14 | 12 | 10 |
Refund percentages reproduced verbatim from HUD Handbook 4000.1, Section II.A.8 (handbook last revised November 26, 2025). All values are percentages of the original UFMIP.
The pattern is simple: 80% in month one, falling two percentage points every month, down to 10% in month 36. So the credit is rich early and gone after year three. Mechanically, your lender requests a Refinance Authorization Number through FHA Connection. That system computes the exact credit from your dates. One wrinkle: at least one borrower on the new loan must already hold title as of the case number assignment date.
Say you closed an FHA loan with a $300,000 base loan amount 14 months ago:
Original UFMIP: $300,000 × 1.75% = $5,250
Month 14 = year 2, month 2 on HUD’s table → 54% credit: $5,250 × 54% = $2,835
New $290,000 streamline: $290,000 × 1.75% = $5,075 − $2,835 = $2,240 UFMIP due
Illustrative math only — FHA Connection computes your actual credit from your real dates and amounts, and figures become final on your Loan Estimate. Not a quote, offer, or commitment to lend.
Past the three-year mark, the refund is off the table. The exit decision becomes pure payment math instead. For that, start with our Las Vegas refinance hub, then check the refi-out-of-MIP math our FHA site runs for Las Vegas borrowers.
Didn't FHA mortgage insurance used to cost more?
Yes — most FHA borrowers paid 0.85% annually before March 2023. HUD's Mortgagee Letter 2023-05 announced a reduction of "30 basis points" to the annual premium, and that pricing remains in place in 2026. If an older article scared you off FHA over "expensive mortgage insurance," the math has genuinely improved — on a $400,000 loan, the cut is worth about $100/month.
HUD announced "a 30 basis point reduction to the Annual Mortgage Insurance Premiums" for most FHA loans, effective March 20, 2023 — pricing that still stands in 2026.
When does FHA mortgage insurance go away?
Three exits: automatic removal at 11 years (10%+ down), refinancing to conventional, or paying off the loan.
- Less than 10% down: annual MIP stays for the life of the loan.
- 10% or more down: annual MIP ends automatically after 11 years — here’s the step-by-step way to remove FHA MIP when that day comes.
In practice, most FHA borrowers don't wait. Once the home has appreciated and the loan balance is under 80% of the home's value, many refinance into a conventional loan with no mortgage insurance at all. FHA is often the door in — not the loan you keep for 30 years. When you're ready to model that exit, a Valley West loan officer can run the refinance break-even for you.
FHA MIP vs. conventional PMI: which costs less?
It depends mostly on your credit score. Conventional private mortgage insurance (PMI) is priced by credit tier; FHA MIP is flat. Here's the honest comparison:
| FHA MIP | Conventional PMI | |
|---|---|---|
| Priced by credit score | No — same premium at 580 or 780 | Yes — steeply cheaper with high scores |
| Upfront premium | 1.75% (usually financed) | None |
| Removal | 11 years (10%+ down) or refinance | Cancellable at ~20% equity — no refinance needed |
| Minimum down payment | 3.5% (580+ score) | 3% (program-dependent) |
| Tends to win for | Building credit, thin files, mid-600s scores | Strong credit, larger down payments |
A buyer with a mid-600s score and 3.5%–5% down often finds the FHA package — rate plus MIP combined — produces a lower total monthly payment. A 740+ buyer usually prices better conventional — and if PMI is the sticking point, it’s worth weighing the lender-paid PMI tradeoff too. The right answer is a side-by-side your loan officer runs for you — both loans, real numbers, same day. That's exactly what we do at Valley West Mortgage: we shop multiple investors on both FHA and conventional pricing rather than fitting you to a single product.
See your real FHA vs. conventional numbers.
Get a personalized side-by-side — rate, MIP or PMI, and total monthly payment on both loans — from a Las Vegas mortgage lender licensed in 32+ states. No obligation.
Get your fast quoteKey terms in plain English
A few words on this page can sound technical. Here is the simple version.
- MIP
- Mortgage insurance premium — the fee every FHA borrower pays so the FHA can guarantee the loan.
- UFMIP
- Upfront MIP: the one-time 1.75% premium at closing, usually financed into the loan instead of paid in cash.
- Annual MIP
- The yearly premium (0.55% or 0.50% for most 30-year loans) divided into your monthly payment.
- PMI
- Private mortgage insurance — the conventional-loan equivalent, priced by credit score and cancellable at roughly 20% equity.
- LTV
- Loan-to-value: your loan balance as a percentage of the home's value. Under 80% LTV is the threshold for dropping mortgage insurance via a conventional refinance.
FHA mortgage insurance FAQ
How much is FHA mortgage insurance in 2026?
FHA charges a 1.75% upfront premium (usually financed into the loan) plus an annual MIP of 0.55% for most 30-year loans with minimum down payment, or 0.50% with at least 5% down. The annual premium is divided by 12 and added to the monthly payment.
Can FHA mortgage insurance be removed without refinancing?
Only if you put 10% or more down — in that case annual MIP ends automatically after 11 years. With less than 10% down, MIP lasts the life of the loan, and refinancing out of the FHA loan is the path to removing it.
Is the upfront 1.75% ever refunded?
Partially. If you refinance into another FHA loan within three years, HUD applies a prorated refund of your original upfront premium toward the new loan's UFMIP.
Does MIP change with my credit score?
No. FHA premiums are the same at 580 as at 780 — which is precisely why FHA tends to win for buyers still building credit, while conventional PMI rewards strong scores.
Is FHA MIP cheaper than it used to be?
Yes. Before March 2023 most FHA borrowers paid 0.85% annually. HUD cut the annual premium by 30 basis points, and the 0.55%/0.50% pricing remains in effect in 2026.
What's the FHA loan limit in Las Vegas for 2026?
The 2026 FHA limit for a one-unit home in Clark County is $541,287 (HUD). Above that, you'd be looking at conventional or other programs.
Can the 1.75% FHA upfront premium be paid in cash instead of financed?
Yes. HUD allows either route: finance the full UFMIP into the loan or pay it entirely in cash at closing — no partial splits. Financing it costs nothing out of pocket on closing day; paying cash keeps the loan balance about 1.75% smaller for the life of the loan.
How much of the FHA upfront premium comes back on an FHA-to-FHA refinance?
It depends on timing. HUD’s refund schedule starts at 80% of the original UFMIP in month one and falls two percentage points each month, reaching 10% in month 36. After three years there is no refund, and the credit only reduces the new loan’s upfront premium — it is never paid out as cash.
The bottom line
FHA mortgage insurance is the toll for the most forgiving mainstream loan program in America: 1.75% once, 0.55% a year, no credit-score penalty. For buyers with strong credit it's a reason to price conventional first; for everyone still building, it's often the cheapest total payment on the board — and a loan you refinance out of once equity does its work. Either way, the decision should be made on a same-day side-by-side, not a rule of thumb.
Two loans. Real numbers. Ten minutes.
Talk to a local Las Vegas loan officer and see FHA and conventional priced side by side for your exact scenario.
Start your fast quoteSources
- HUD — Mortgagee Letter 2023-05: Reduction of FHA Annual Mortgage Insurance Premium rates (0.55%/0.50% schedule): hud.gov
- HUD — Single Family Housing Policy Handbook 4000.1, Section II.A.8 & Appendix 1.0 (UFMIP 175 bps; UFMIP refund schedule): hud.gov
- HUD — FHA Single Family Mortgage Insurance Premiums (UFMIP 1.75% & annual MIP schedule): hud.gov
- HUD — FHA Mortgage Limits (2026 Clark County one-unit $541,287): entp.hud.gov
- CFPB — What is mortgage insurance and how does it work: consumerfinance.gov
Across Valley West: Going FHA? FHAHomeLoans.services, our dedicated FHA site, covers rates, limits, and the application end to end.
Keep reading
- RatesToday's mortgage ratesLive rate snapshots across loan types.
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- GuidesWhat is a non-QM loan?When the standard box doesn't fit your income.
- FHA siteFHA down payment rules for 2026The 3.5% rule, gift funds, and Nevada assistance.
Last updated: August 6, 2026 — added HUD’s UFMIP refund schedule and re-verified the 1.75% upfront premium against Handbook 4000.1 (rev. 11/26/2025); premium chart verified against HUD Mortgagee Letter 2023-05.
