FHA MIP vs PMI
Choosing between these comes down to your credit, your cash, and how long you will keep the loan. Here is the 2026 breakdown with the numbers that actually differ.
FHA MIP includes a 1.75% upfront premium plus 0.55%/year that usually lasts the loan's life. Conventional PMI has no upfront fee, varies with credit (0.2-1.5%), and cancels automatically at 78% LTV.
| Factor | FHA | Conventional PMI |
|---|---|---|
| Upfront fee | 1.75% | None |
| Annual cost | 0.55% (flat) | 0.2-1.5% (credit-based) |
| Cancellable | Usually no | Yes, at 20-22% equity |
| Credit-sensitive | No | Yes |
The bottom line
PMI is cheaper for strong credit and ends; MIP is flat and usually permanent.
Run both options with a lender before deciding — the right choice can shift by a few thousand dollars depending on your exact credit score, down payment, and how long you plan to stay in the home.
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Frequently Asked Questions
- FHA MIP vs PMI — which is better in 2026?
- PMI is cheaper for strong credit and ends; MIP is flat and usually permanent.
- Can I switch later?
- Yes. Many borrowers start with FHA and refinance into another loan once their credit and equity improve, which can also remove FHA mortgage insurance.