If you’re thinking about selling your home—even if it’s months down the road—you’ve probably noticed something frustrating: most real estate agents sound exactly the
The Difference Between PMI and MIP
Dated: December 5 2025
Views: 61
Understanding Mortgage Insurance: What It Is and When It Goes Away
Mortgage insurance exists for two big reasons:
1️⃣ It protects lenders if a buyer stops making payments, and
2️⃣ It helps buyers become homeowners sooner by allowing smaller down payments.
FHA Loans & MIP
If you’re using an FHA loan, your mortgage insurance is called MIP—Mortgage Insurance Premiums. These premiums are built right into your monthly payment.
Here’s how long MIP sticks around:
If your FHA loan was originated after June 3, 2013 and you put down less than 10%:
MIP stays for the entire life of the loan.If you put down 10% or more:
MIP can be removed after 11 years.
Conventional Loans & PMI
For loans that aren’t government-backed—your typical conventional loans—you may pay PMI (Private Mortgage Insurance). This applies when you put down less than 20% at closing.
These loans follow the guidelines set by Fannie Mae and Freddie Mac, the government-sponsored entities that help keep mortgage money flowing by purchasing mortgages from banks.
The good news? PMI is not forever.
Once your equity reaches 20%–22%, whether through:
Making your regular monthly payments,
Adding extra principal payments, or
Benefiting from home value appreciation,
you can request that your loan servicer remove the PMI.
Understanding mortgage insurance is a key part of planning for homeownership—and knowing when it falls off can help you save money over time. If you ever want to look at your own loan options or equity position, I’m always happy to walk through it with you!
Crystal Anderson
Crystal Anderson | Managing Broker | Regional Vice President | Berkshire Hathaway HomeServices Indiana Realty (Columbus, IN)Crystal Anderson—widely known as “The Tie Dye Agent”&mdash....
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Last Updated: September 22, 2026 8:10 PM UTC
