FHA MIP vs. conventional PMI

They are both mortgage insurance, they both come off your payment eventually — except one of them usually does not.

By Behbud Ramazan · Last reviewed August 2026

Short version: Conventional PMI cancels at 80% and terminates at 78%. On most FHA loans written since June 2013, MIP lasts the life of the loan and only a refinance removes it.

The core difference

	Conventional PMI	FHA MIP
Cancellable by request	Yes, at 80% LTV	Usually no
Automatic termination	Yes, at 78% LTV	Only with 10%+ down
Upfront premium	None	1.75% of the loan
Based on current value	Possible via appraisal	No
Way out	Equity	Refinance

The 2013 rule that changed everything

For FHA loans closed on or after June 3, 2013, the annual mortgage insurance premium runs for the life of the loan if the down payment was less than 10%. With 10% or more down, it drops after 11 years.

Since the great majority of FHA borrowers put down the minimum 3.5%, most FHA mortgage insurance is permanent. Paying the balance down does nothing. Getting an appraisal does nothing. The only exit is a new loan.

Loans that closed before that date follow older rules that did allow cancellation. If your FHA loan is from 2012 or earlier, ask your servicer where you stand — the answer may be different from what you assume.

The refinance math

Refinancing an FHA loan into a conventional one removes MIP permanently, and if you have 20% equity it adds no PMI in its place. Whether that is worth doing turns on the rate.

If rates are near or below your current rate: the case is strong. You drop the premium and keep a comparable payment.
If rates are well above yours: run the numbers carefully. A higher rate on the full balance can easily cost more than the premium you are trying to escape.
If you have less than 20% equity: you would trade FHA MIP for conventional PMI — which at least can be cancelled later, but does not help immediately.

What about VA and USDA

VA loans carry no monthly mortgage insurance at all — only a one-time funding fee at closing, which is waived for many disabled veterans. USDA loans carry an annual fee that, like FHA, generally runs the life of the loan.

See your own dates

Enter your loan and get all four cancellation routes with the date you qualify for each.

How to tell which loan you have

It is not always obvious from a statement. Look for a case number or the letters FHA in your closing documents, or simply call your servicer and ask. The answer determines whether any of the cancellation strategies apply to you at all, so it is worth confirming rather than assuming.