Mortgage Insurance Premium (MIP) (MIP)
Direct definition
The mortgage insurance required on FHA loans, paid both upfront and monthly.
Written by the Vabasso Mortgage Editorial Team · Reviewed against agency and federal sources · Read our editorial policy for how we research and review mortgage content
Plain-English explanation
FHA charges an upfront MIP (financed into the loan) and an annual MIP paid monthly. On most current FHA loans with less than 10% down, MIP lasts the life of the loan.
Why it matters
MIP is a real ongoing cost that can make FHA more expensive than conventional over the long run.
Where you may see it
- Loan Estimate
- Closing Disclosure
- Mortgage statement
- FHA loan disclosures
A real-world example
A $350,000 FHA loan with 3.5% down carries upfront MIP (about $6,000 financed) and annual MIP of roughly 0.55% paid monthly.
Educational and illustrative only
A common misunderstanding
MIP isn't the same as homeowners insurance and doesn't protect the borrower — it protects the lender if the loan defaults.
Ask Vabasso AI
This glossary provides general educational information. Mortgage terminology, qualification methods, forms, timelines, fees, program rules, and legal meanings may vary by lender, investor, loan program, property, occupancy, state, and transaction. Definitions do not represent loan approval, legal advice, tax advice, or a commitment to lend.
- Author
- Vabasso Mortgage Editorial Team
- Reviewed by
- Vabasso Mortgage Licensed Advisory Team
- Last reviewed
- July 30, 2026