FHA Refinance Calculator
ℹ RefinanceUSA is not a lender. Results are estimates — actual MIP rates depend on loan amount, LTV, and term. How we calculate
FHA MIP: The Hidden Cost That Makes Refinancing Worthwhile
Most FHA homeowners focus only on the interest rate when evaluating a refinance. But the bigger savings opportunity is often the MIP (Mortgage Insurance Premium) — a monthly charge that never stops on loans originated after June 2013 with less than 10% down.
Current FHA MIP Rates (2026)
| Loan Term | LTV | Annual MIP | Monthly (on $280K) |
|---|---|---|---|
| 30-year, ≤ $726,200 | ≤ 90% | 0.55% | $128/mo |
| 30-year, ≤ $726,200 | > 90% | 0.50% | $117/mo |
| 30-year, > $726,200 | ≤ 90% | 0.70% | $163/mo |
| 15-year, ≤ $726,200 | ≤ 90% | 0.15% | $35/mo |
| 15-year, ≤ $726,200 | > 90% | 0.40% | $93/mo |
FHA Streamline vs. Full FHA Refinance vs. FHA-to-Conventional
| Path | Appraisal | Income Check | MIP After Refi | Best For |
|---|---|---|---|---|
| FHA Streamline | Not required | Minimal | Continues (at new rate) | Quick rate drop, credit-impaired borrowers |
| Full FHA Refi | Required | Full underwriting | Continues | Cash-out or credit improvement |
| FHA → Conventional | Required | Full underwriting | Eliminated (if LTV ≤ 80%) | LTV ≤ 80%, drop MIP forever |
3 FHA Refinance Scenarios
Scenario 1 — FHA Streamline: Rate drop + MIP reduction
Pre-2023 FHA loan, still paying 0.85% MIP
| Current balance | $280,000 |
| Current rate | 7.25% |
| Current MIP | 0.85%/yr = $198/mo |
| Current total payment (P&I + MIP) | $2,103/mo |
| New rate (Streamline) | 6.50% |
| New MIP (post-2023 rate) | 0.55%/yr = $128/mo |
| New total payment | $1,895/mo |
| Monthly savings | $208/mo ($137 rate + $70 MIP) |
| Closing costs (Streamline, ~1.5%) | $4,200 |
| Break-even | 20 months |
This is the highest-value FHA Streamline scenario. Homeowners who locked in at 7%+ in 2022–2023 and are still paying the old 0.85% MIP rate can save over $200/month with a single Streamline application — no appraisal needed.
Scenario 2 — FHA to Conventional: Escape MIP permanently
LTV dropped below 80% — time to drop FHA forever
| Current balance | $245,000 |
| Current home value | $320,000 (LTV 76.6%) |
| Current rate + MIP | 6.75% + 0.55% MIP = $1,786/mo total |
| New conventional rate | 6.625% (no PMI at 76.6% LTV) |
| New monthly P&I | $1,568/mo |
| Monthly savings | $218/mo (rate + full MIP elimination) |
| Closing costs (2%) | $4,900 |
| Break-even | 22 months |
| 10-year net savings | +$21,260 |
Eliminating MIP by switching to conventional is the most powerful FHA refinance move available. The MIP savings alone (~$128–$200/month) often outweigh the entire interest rate differential. If your current LTV is at or below 80%, this path almost always wins over an FHA Streamline.
Scenario 3 — Marginal case: Rate barely moves
0.25% rate drop only — does it still pencil out?
| Current balance | $310,000 |
| Rate change | 6.75% → 6.50% |
| MIP change | 0.55% → 0.55% (unchanged) |
| Monthly savings (rate only) | $52/mo |
| Closing costs (FHA Streamline) | $3,500 |
| Break-even | 67 months (5.6 years) |
A 0.25% rate drop on a current FHA loan barely justifies a Streamline. The FHA's net tangible benefit requirement (typically a 5% reduction in combined P&I + MIP payment, or switching from an ARM) should gate this — lenders often won't approve a Streamline that doesn't clear the threshold. At 0.25%, consider waiting for a larger rate drop.
FHA Streamline Refinance Requirements
- 6-month seasoning: Your current FHA loan must be at least 6 months old and have at least 6 on-time payments.
- No late payments: No 30-day late payments in the past 6 months, no more than one in the past 12 months.
- Net tangible benefit: The new loan must provide a measurable benefit — typically a 5%+ reduction in combined P&I and MIP payment, or moving from an ARM to a fixed-rate loan.
- No cash out: FHA Streamline is rate-and-term only. Maximum cash back at closing is $500.
- No appraisal required: The lender uses the original or most recent appraisal on file, which protects borrowers who owe more than their home's current value.
- Occupancy: You must certify the property is your primary residence (or was at origination for the non-credit qualifying Streamline).
Upfront MIP on a New FHA Loan
Any new FHA loan (including a Streamline) requires an upfront MIP (UFMIP) of 1.75% of the loan amount. On a $280,000 balance, that is $4,900 — typically financed into the new loan rather than paid at closing. The Streamline's net tangible benefit calculation must still hold after this addition to the loan balance.
Frequently Asked Questions
What is an FHA Streamline Refinance?
A simplified refinance exclusively for existing FHA borrowers. It requires no appraisal and minimal income documentation. Eligibility requires 6 months of on-time FHA payments and a net tangible benefit — typically a 5%+ reduction in your combined principal, interest, and MIP payment.
How long do I pay FHA MIP?
For FHA loans originated after June 3, 2013: if your original down payment was less than 10%, you pay annual MIP for the entire life of the loan. If you put 10% or more down, MIP cancels after 11 years. To eliminate it before that, you must refinance to a conventional loan once your LTV reaches 80% or below.
When should I switch from FHA to conventional?
As soon as your LTV (based on a new appraisal) reaches 80% or lower. At that threshold, a conventional loan requires no PMI, so you eliminate the entire MIP cost — often $128–$300/month. Even if the interest rate on the conventional loan is similar to your FHA rate, the MIP elimination typically makes it worthwhile.
What are current FHA MIP rates?
As of 2026, annual MIP for most 30-year FHA loans under $726,200 is 0.55%/yr (LTV ≤ 90%) or 0.50%/yr (LTV > 90%). The upfront MIP (UFMIP) is always 1.75% of the loan amount. These rates were reduced from the prior standard of 0.85% in March 2023.
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The main RefinanceUSA calculator lets you enter multiple lender quotes and compare every detail — payment, break-even, and lifetime savings — so you can see exactly which FHA or conventional offer is best for your situation.
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