FHA Monthly Mortgage Insurance Lowered

Monthly Mortgage Insurance Lowered!

Monthly Mortgage Insurance Lowered

Are you in the market for a new home and considering an FHA loan? If so, you’ll be happy to know that the Federal Housing Administration (FHA) has announced a reduction in the monthly mortgage insurance premium (MIP) for FHA loans. In this blog post, we’ll discuss what you need to know about this change.


What is FHA Monthly Mortgage Insurance Premium (MIP)?

FHA loans are popular among first-time homebuyers because they require a lower down payment than traditional loans. However, to protect the lender in case of default, the borrower is required to pay a monthly mortgage insurance premium. This premium is paid in addition to the principal and interest on the loan and is included in the borrower’s monthly mortgage payment.

The amount of the monthly mortgage insurance premium is determined by the loan-to-value ratio (LTV) and the length of the loan. In the past, the MIP for FHA loans was quite high, making it more expensive for borrowers to own a home.


Lower MIP Rates

The good news is that FHA Monthly Mortgage Insurance Lowered for FHA loans, making it more affordable for borrowers to own a home. Effective March 20, 2023, the MIP rates for 30-year loans with LTVs of 95% or lower are 0.55% of the loan amount. For loans with LTVs above 95%, the MIP rate is 0.50% of the loan amount. This is a significant reduction from the previous rates of .85% and .80%, respectively. On a $300,000 purchase price this would reflect a $72 a month saving on an LTV above 95% resulting in a $864 yearly savings amount.


Impact on Borrowers

This change in the MIP rates can have a positive impact on borrowers, making homeownership more accessible and affordable. By reducing the monthly mortgage insurance premium, borrowers will have more money available to put towards their principal and interest payments. This could result in lower monthly mortgage payments, making it easier for borrowers to qualify for a loan.

It’s important to note that the FHA requires borrowers to pay mortgage insurance for the life of the loan, unlike conventional loans where the mortgage insurance is typically canceled when the borrower’s equity reaches a certain level. However, the reduced MIP rates will still result in savings over the life of the loan.



The FHA’s Monthly mortgage insurance lowered premiums is great news for homebuyers who are considering an FHA loan. By making homeownership more accessible and affordable, more people may be able to achieve their dream of owning a home. If you’re interested in an FHA loan, be sure to call CM Mortgage Services, Inc. and speak with one of our loan officers who can provide you with more information about the new MIP rates and how they can benefit you.


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West Chester, PA 19382

(610) 430-6852