Mortgage Glossary
Mortgage Insurance Premium (MIP)
Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
Mortgage insurance premium (MIP) is the insurance charged on FHA loans, paid both upfront and annually.
What Mortgage Insurance Premium (MIP) means
The upfront MIP is 1.75% of the loan, added to the balance, and the annual MIP runs about 0.15%–0.55%. On most FHA loans with low down payments, annual MIP lasts the life of the loan.
Florida example
A Florida FHA borrower on a $300,000 loan pays $5,250 upfront MIP plus roughly $137 a month in annual MIP. Refinancing into a conventional loan once they hit 20% equity is the usual way to shed it.
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