The Quick Read: How long you pay FHA mortgage insurance is set when the loan starts. On a thirty-year loan above ninety percent loan-to-value, the annual premium lasts for the whole term. At ninety percent or below, it ends after eleven years. Reaching 20% equity does not cancel it, and extra principal payments do not either. The usual way out is paying off the loan, often by refinancing.
Those are the rules in plain terms.
Key Takeaways
- Duration is fixed at origination by your original loan-to-value (LTV, the loan balance as a percentage of the home’s value) and your loan’s case-number date.
- FHA insurance is not PMI. The equity-based cancellation rights that protect conventional borrowers do not apply to it.
- An FHA Streamline refinance keeps the premium going. It does not remove it.
- Leaving FHA for a non-FHA loan is the usual way to end the insurance, and that loan has its own tests.
Refinance savings and break-even estimate
The starting figures are an example value with a balance in proportion and a placeholder for costs. Replace them with yours, and enter the current rate from your statement.
Editable benchmark: 7.32% as of October 22, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a refinance quote.
Illustrative starting assumptions: a $350,000 home value, a $245,000 current balance, a current rate you enter and a remaining term seeded at twenty-five years, closing costs seeded at $5,000 as an editable placeholder (not a fee quote) and rolled into the new loan, a thirty-year term at the current Freddie Mac benchmark, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The new rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a refinance quote; a refinance is priced by the lender at lock, and the current rate, the remaining term and the closing costs are figures you enter. The current payment is estimated from the balance, the current rate and the remaining term; the break-even divides the closing costs by the monthly saving and ignores the interest effect of a longer term. On the VA IRRRL the funding fee is added to the loan unless the veteran is exempt. Taxes and insurance are editable estimates. Licensed in sixteen states for consumer mortgages; Lendmire is a broker, never the lender.
What FHA Mortgage Insurance Is and What It Costs
FHA mortgage insurance protects the lender, not you. If you default, the insurance pays the lender's loss. You pay for that protection.
There are two pieces. The upfront premium is 1.75% of the base loan on the programs we place, and it is normally financed into the balance. The annual premium is billed monthly inside your payment. On the wholesale programs we work with, the annual premium runs between 0.15% and 0.75% of the balance, depending on term, loan amount and LTV.
Both pieces are program facts, not prices. What applies to your file depends on your term, loan amount and LTV. The CFPB confirms that FHA insurance is required on all FHA loans, with an upfront cost in closing costs and a monthly cost in the payment.
One more point surprises people. FHA insurance costs the same regardless of credit score, with a slight increase for down payments under five percent. Private mortgage insurance, by contrast, is generally cheaper for borrowers with good credit. Hold that thought. It explains why strong-credit borrowers often look at leaving FHA.
How Long You Pay: The Duration Rules
Duration depends on two things: your original LTV and when your loan received its FHA case number.
For loans with case numbers assigned on or after June 3, 2013, the rule is simple:
| Original LTV | Annual premium lasts |
|---|---|
| Above 90% (30-year loan) | The full loan term |
| 90% or less | 11 years |
A 3.5% down payment means a 96.5% starting LTV. That puts most first-time FHA buyers in the full-term group. A buyer who put down 10% or more lands in the eleven-year group. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Those 2013 changes came through a HUD mortgagee letter. HUD's superseded policy list confirms it revised how the annual premium is cancelled.
Here is the part most people miss. The clock does not reset. Appreciation does not move you into the shorter group. Paying the balance down does not either. Your starting LTV decided it on day one.
Find Your Loan's Date
Look at your original closing paperwork or your servicer's loan details. You want the FHA case number assignment date, not just the closing date. If you cannot find it, ask your servicer. They administer the insurance and can tell you which rule applies.
Can You Cancel It?
Rarely, and only for older loans. HUD says premium cancellation is limited to active risk-based cases with a closing date after December 31, 2000 and a case number assigned before June 3, 2013, under its Mortgagee Letter 2000-46 rules. HUD also notes that the insurance agreement is between FHA and the mortgage company, so you contact your mortgage company to ask what they require.
If your loan falls outside that window, cancellation is not available. Termination happens when the mortgage is paid in full before maturity. That is not cancellation. It is the loan ending.
Loans from the early 1990s through 2000 sit in a different group again. Some secondary sources describe those as non-cancellable. Confirm your loan's status with your servicer rather than relying on a general chart.
FHA Insurance vs. PMI: Why the 80% Rule Does Not Apply
Conventional borrowers have a legal right to request cancellation of private mortgage insurance when the scheduled balance reaches 80% of the original value, per the CFPB. That right applies to private insurance.
FHA insurance is a different product. The CFPB's examination manual states that the Homeowners Protection Act, the law behind those cancellation rights, does not apply to insurance made available under the National Housing Act. FHA insurance is made available under that Act.
| Feature | FHA mortgage insurance | Conventional PMI |
|---|---|---|
| Who it protects | The lender | The lender |
| Paid to | FHA | A private insurer |
| Cancel at 80% LTV | No | Yes, on request |
| Cost tied to credit score | No | Yes |
| Ends when | Duration rule or payoff | Cancellation or payoff |
What Does Not End It
A few myths come up in nearly every conversation I have with FHA borrowers.
- "I hit 20% equity." That is the PMI rule. It does not govern FHA insurance.
- "I made extra principal payments." Faster paydown does not cancel FHA insurance. The Minnesota Attorney General's consumer fact sheet says the same about FHA and VA insurance.
- "Eleven years applies to everyone." It applies only to certain loans, set by original LTV and case-number date.
- "My servicer decides." The insurance contract is with FHA. Your servicer administers it.
- "The 2023 premium cut applies to my loan." HUD's announcement cut the annual premium by 30 basis points, but only for loans endorsed on or after March 20, 2023. It also left the upfront premium unchanged.
Refinancing and the Insurance: Four Paths
Refinancing is where most borrowers end up. But "refinance" covers very different loans, and each treats the insurance differently.
Path 1: FHA Streamline
The Streamline refinances an existing FHA loan with no appraisal and a limited credit review. HUD's requirements are that the mortgage is already FHA-insured, is current, and produces a net tangible benefit. Closing costs cannot be added to the new mortgage amount.
The catch: the premium continues. A Streamline changes your loan terms. It does not remove the insurance. And since the benefit test looks at the combined cost, a premium change can affect whether the refinance passes. The test lives in HUD Handbook 4000.1 (a section reference is in the FDIC-hosted summary). Your lender runs it for you.
If you are owed some of the upfront premium back, it is generally a partial credit that shrinks over the first three years and applies toward the new upfront premium. It is not paid to you as cash. Confirm the exact amount against HUD's refund chart.
Path 2: FHA Rate-and-Term
This is a full refinance with an appraisal. On a principal residence you have occupied for the previous twelve months, it can reach 97.75% LTV on the programs we use. You stay in FHA, so the insurance continues, but a new loan can reset the duration rules based on the new LTV. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Path 3: FHA Cash-Out
The FHA cash-out reaches 80% LTV on a home owned and occupied for 12 months before the case number. It is a full underwrite with an appraisal. It stays inside FHA, so mortgage insurance stays with it. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Path 4: Refinance Out of FHA
A conventional refinance ends the FHA premium because the FHA loan is paid off. The insurance can be terminated when the mortgage is paid in full before maturity. The new loan has to pass its own tests: credit, income ratios, and an appraisal that shows enough equity. If you are under 20% equity on the new loan, you may carry private mortgage insurance instead. That one can be cancelled later.
Should You Wait or Refinance?
This is a break-even question. Here is how I walk borrowers through it.
1. Check your duration group. If you are in the eleven-year group and near the end, waiting may cost little. If you are in the full-term group, the premium will not end on its own.
2. Check your equity. The appraisal sets the test. If the value has risen, you may have more equity than you assumed. If not, a conventional loan may require private insurance.
3. Check your credit. FHA insurance does not reward strong credit. Conventional insurance does. A borrower with a high score and real equity often gains the most from leaving.
4. Add up what a refinance costs. Closing costs are real. So is any change in the loan's interest cost and term. Compare the monthly insurance you would stop paying against those costs, and see how many months it takes to come out ahead.
5. Think about how long you will stay. If you are likely to sell soon, the break-even may never arrive. A sale also ends the insurance.
One more warning. Do not roll everything into a new thirty-year term without looking at total cost. A lower payment can mean more total interest. That is the mechanics of a refinance, not a pitch.
Credit events matter here too. HUD's waiting periods are two years from a chapter 7 discharge and three years from a foreclosure. Those are HUD rules, and a lender can apply its own overlays.
Older-Loan and Special Cases
- Pre-June 2013 case numbers. Possibly eligible for cancellation under the 2000-46 rules, if the loan closed after December 31, 2000. Your servicer has to confirm.
- Loans from the 1990s. Often treated as non-cancellable. Verify with your servicer.
- 2023 cut exceptions. Secondary summaries note it does not cover certain streamline and simple refinances of older FHA loans. Check the HUD notice for your case.
- Occupancy. HUD treats streamlines on non-owner-occupied properties differently. This article is about primary residences, so that is as far as it goes. FHA financing here is for a home you live in.
Policy Changes to Watch
Premium schedules have changed before, and they can again. Treat news of change as something to watch, not to plan around. A decision that only works if a rule changes is a weak decision. What applies on the day you apply.
Key Terms Defined
Upfront mortgage insurance premium (UFMIP): A one-time charge, 1.75% of the base loan on the programs we place, usually financed into the balance.
Annual mortgage insurance premium (MIP): The recurring charge billed monthly inside the payment, based on term, amount and LTV.
Loan-to-value (LTV): Your loan balance divided by your home's value, shown as a percentage.
Case number: The number FHA assigns to your loan. Its assignment date, with your original LTV, sets which duration rule applies.
Net tangible benefit: HUD's test that a Streamline refinance must leave you measurably better off.
Servicer: The company that collects your payment and administers the insurance on your loan.
Frequently Asked Questions
Can I stop paying FHA mortgage insurance when I reach 20% equity?
Not on a loan with a case number from June 3, 2013 or later. The 80% cancellation right applies to private mortgage insurance, and the federal law behind it does not cover FHA insurance. Your path is the duration rule or paying off the loan.
Does an FHA Streamline remove mortgage insurance?
No. The Streamline stays inside FHA, so the premium continues. It can lower the cost or change the term, but the insurance remains. To end it, you generally need a non-FHA loan.
Will extra principal payments shorten how long I pay?
Not for newer loans. Duration is set at origination by original LTV and case-number date. Extra payments can cut your interest and payoff date, but they do not move you into a shorter insurance group.
Do I get my upfront premium back if I refinance?
Sometimes, in part. A partial credit may apply in the first three years, and it generally goes toward the new upfront premium rather than coming back as cash. Confirm the amount with your servicer and HUD's refund chart.
Who do I call to ask about cancelling?
Your servicer, which is the mortgage company that collects your payment. HUD directs borrowers there, because the servicer administers the insurance. Ask for your case number date and original LTV, and ask which rule applies to your loan.
For the program's current guidelines, see FHA loan programs.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending partners, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB – What is mortgage insurance and how does it work?
2. HUD – Superseded Single Family Policy Documents
3. HUD – Single Family Mortgage Insurance Premiums
4. CFPB – When can I remove PMI?
5. CFPB – HPA examination manual
6. Minnesota Attorney General – PMI Fact Sheet
8. HUD – Streamline Refinance Your Mortgage
This article is part of Lendmire’s FHA loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: FHA Cash-Out Refinance State Rules on Homestead and Spouse Signatures · FHA Cash-Out vs. 203k Refinance for an Existing FHA Borrower · FHA Cash-Out Rules for a Spouse Who Lives Out of State
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.