FHA mortgage insurance makes homeownership more accessible, but it comes with ongoing costs that many homeowners would prefer to eliminate. If you’re wondering whether you can remove FHA mortgage insurance, the answer depends on your loan terms, down payment, and how much equity you’ve built. In this guide, we’ll walk through the requirements, strategies, and timing to drop FHA mortgage insurance and lower your monthly payment.

What is FHA mortgage insurance?

FHA mortgage insurance is required on all loans backed by the Federal Housing Administration. It protects lenders if a borrower defaults and is paid by the homeowner in two parts: an upfront mortgage insurance premium (UFMIP) and an annual mortgage insurance premium (MIP), which is divided into monthly payments. 

This cost helps make FHA loans available to buyers with lower credit scores and smaller down payments. But it adds hundreds of dollars to your mortgage bill each month.

Can you remove FHA mortgage insurance?

Yes, but how and when you can remove FHA mortgage insurance depends on when you took out your loan and how much you put down. 

The FHA has two rules based on the loan’s origination date and down payment:

• If you put down less than 10%, you must pay MIP for the life of the loan
• If you put down 10% or more, MIP lasts for 11 years

As a quick note, if you took out your loan before June 3, 2013, your removal timeline may differ based on loan terms and equity amount. 

For most borrowers, though, the only way to remove FHA mortgage insurance early is to refinance into a conventional loan.

How to remove FHA mortgage insurance by refinancing

The most effective way to remove FHA mortgage insurance before the 11-year mark or lifetime requirement is by refinancing into a conventional mortgage. To do this successfully, you generally need:

• At least 20% equity in your home (based on appraised value)
• A strong credit score (typically 620 or higher)
• A consistent income and stable employment
• A favorable interest rate environment that makes refinancing worthwhile

When you refinance, you’ll replace your FHA loan with a new conventional loan that doesn’t require MIP as long as your loan-to-value (LTV) ratio is 80% or lower. This not only removes FHA insurance but may also allow you to lower your interest rate or change loan terms.

When should you refinance to remove FHA mortgage insurance?

Timing is key when deciding to refinance. You’ll want to make sure you’ve built enough equity and that current interest rates make a refinance financially smart. Look for these indicators:

• Home values in your area have risen significantly
• You’ve made consistent payments and reduced your loan balance
• Your credit score has improved since your original loan
• You plan to stay in the home long enough to recoup closing costs from refinancing

Use a refinance calculator to compare your current mortgage (with MIP) to a conventional option. Make sure the monthly savings justify the upfront refinance fees.

Can you remove FHA mortgage insurance without refinancing?

If you made a down payment of 10% or more when you took out your FHA loan, your mortgage insurance will automatically cancel after 11 years of on-time payments. You do not need to request this removal — it happens automatically as long as you’re current on your loan.

However, if you put down less than 10%, FHA mortgage insurance stays for the life of the loan. There is no way to remove it without refinancing into a conventional mortgage.

Key differences between FHA and conventional mortgage insurance

Understanding how FHA mortgage insurance compares to conventional private mortgage insurance (PMI) can help you evaluate your options:

FHA mortgage insurance:

• Required regardless of down payment
• Cannot be removed for loans with <10% down
• Includes both upfront and ongoing premiums
• Lifetime cost for many borrowers unless they refinance

Conventional PMI:

• Required only with down payments under 20%
• Can be canceled once you reach 20% equity
• No upfront premium
• Offers more flexibility and long-term savings

If you’re eligible for a conventional refinance, switching could help you cut monthly costs and gain more control over your mortgage insurance timeline.

Pros and cons of refinancing to remove FHA mortgage insurance

Pros:

• Eliminates MIP and lowers your total mortgage payment
• Opportunity to get a better interest rate
• Switch to a shorter loan term if desired
• No future mortgage insurance payments once you reach 80% LTV

Cons:

• Requires closing costs and potential appraisal fees
• You need sufficient equity and a qualifying credit profile
• Rates must be low enough to make refinancing worthwhile
• May restart your loan term, increasing total interest paid over time

Always weigh the costs of refinancing against the long-term savings. Even if your new interest rate isn’t much lower, removing MIP could still reduce your monthly payments significantly.

What if you can’t remove FHA mortgage insurance yet?

If you’re not ready to refinance or haven’t built enough equity, there are still steps you can take to prepare:

• Make extra principal payments to build equity faster
• Monitor home values in your area — rising prices help reduce LTV
• Improve your credit score to qualify for better refinance terms
• Re-evaluate your loan annually to determine when refinancing makes sense

You can also speak with your lender or mortgage broker to assess whether a refinance is possible now or what steps to take to qualify in the future.

Exploring your FHA mortgage insurance removal options

If you’re looking for ways to remove FHA mortgage insurance, refinancing into a conventional loan is the most reliable path — especially if you put down less than 10% originally. While FHA loans help make homeownership more accessible, the mortgage insurance can be expensive over time. With the right equity and credit profile, you can lower your monthly payment and eliminate MIP altogether.

It’s important to track your home equity, stay on top of your credit health, and compare rates from multiple lenders to find the best time to refinance. Refinancing and removing FHA mortgage insurance could save you thousands over the life of your loan.

If you want to see what kind of interest rate you could get if you refinanced today, we can help. Use our rate tables to compare rates, calculate savings, and find lenders that can help you cut your monthly costs.