How to Remove FHA Mortgage Insurance Premiums
When you can stop paying mortgage insurance on an FHA loan
You can remove FHA mortgage insurance in two situations: if you put down 10 percent or more at closing, you can request removal after 11 years of payments. If you put down less than 10 percent, the insurance stays for the life of the loan — you cannot remove it, but you can refinance into a conventional mortgage once you have enough equity.
The key difference is your down payment amount. FHA loans allow down payments as low as 3.5 percent, which means most borrowers carry mortgage insurance for the entire loan term. Knowing which category you fall into determines whether removal is possible and what your next steps are.
Key Takeaways
- FHA mortgage insurance can only be removed if you made a down payment of 10 percent or more; otherwise it remains for the life of the loan.
- Borrowers with 10 percent down can request removal after 11 years of on-time payments by contacting their loan servicer in writing.
- If you put down less than 10 percent, refinancing into a conventional loan is the only way to eliminate mortgage insurance.
- Refinancing requires you to have built enough equity (usually 20 percent) and to meet current lending standards, which may be stricter than when you originally borrowed.
- Your loan servicer handles removal requests and can tell you your exact down payment percentage and current loan balance.
Understanding FHA mortgage insurance and your down payment
FHA mortgage insurance comes in two parts: an upfront premium paid at closing (usually rolled into your loan balance) and an annual premium divided into monthly payments. The annual premium amount depends on your down payment and loan size, but the removal rules depend only on whether you put down 10 percent or more.
Your original closing documents show your down payment percentage. If you cannot find them, your loan servicer can confirm this in one phone call. This single number determines your entire path forward, so verify it before making any decisions.
Removing mortgage insurance after 11 years with 10 percent down
If your down payment was 10 percent or more, you can request removal once you have made 11 years of on-time payments. You do not need to wait for the loan to reach a specific age — the 11 years counts from your first payment, regardless of when you request removal.
Contact your loan servicer in writing (email, certified mail, or their online portal) and request cancellation of the mortgage insurance premium. Include your loan number and a statement that you have made 11 years of consecutive on-time payments. The servicer must respond within 30 days and either remove the insurance or explain in writing why they cannot.
Once removed, your monthly payment drops immediately. The amount of the drop depends on your loan size and the annual insurance rate, but borrowers typically see a reduction of $100 to $300 per month. Ask your servicer for a new payment amount in writing before the removal takes effect so you know what to expect.
Refinancing to a conventional loan if you put down less than 10 percent
If your down payment was less than 10 percent, FHA mortgage insurance cannot be removed. Your only option is to refinance into a conventional mortgage, which does not require mortgage insurance once you have 20 percent equity in the home.
Refinancing means taking out a new loan to pay off your existing FHA loan. You will pay closing costs again (typically 2 to 5 percent of the loan amount), so refinancing only makes financial sense if the monthly savings from removing insurance outweigh those costs. A loan officer can calculate the break-even point for your specific situation.
To refinance, you need to meet current lending standards, which may be stricter than the standards when you originally borrowed. Lenders will pull a new credit report, verify your income, and order a new appraisal. If your credit has dropped, your income has changed, or your home's value has fallen, you may not may have access to for a conventional loan even if you have enough equity.
Building equity to refinance
Conventional lenders typically require 20 percent equity before they will remove the mortgage insurance requirement. This means your home must be worth at least five times what you still owe on the loan. If you put down 3.5 percent, you started with 3.5 percent equity, so you need to pay down the loan balance or wait for the home to appreciate enough to reach 20 percent.
You can check your current equity by subtracting what you owe from what your home is worth. Your loan servicer can tell you the balance. Estimating your home's value is harder — you can use online tools like Zillow or Redfin for a rough number, but a formal appraisal (which costs $300 to $500) gives lenders the number they will actually use.
Some borrowers reach 20 percent equity through a combination of payments and home appreciation. Others never reach it, especially if they put down 3.5 percent on a home that does not appreciate quickly. In those cases, refinancing may never be possible, and mortgage insurance remains for the life of the loan.
What happens if you miss payments before requesting removal
If you have missed even one payment in the past 11 years, you cannot request removal based on time alone. Some loan servicers will still remove insurance if you can document that you have made 11 consecutive on-time payments since the missed payment, but this varies by servicer and by the terms of your specific loan.
Contact your servicer directly to ask whether your payment history qualifies you for removal. Bring documentation of on-time payments if you have it. If removal is not possible, refinancing into a conventional loan remains your only option — and you will need to demonstrate a solid payment history to may have access to for the new loan.
Comparing the cost of keeping insurance versus refinancing
Before you refinance, calculate whether the monthly savings actually justify the upfront cost. Here is what to compare: your current monthly FHA insurance payment against the cost of refinancing plus the monthly payment on a new conventional loan.
Ask your loan servicer for your current annual mortgage insurance premium (the dollar amount, not just the percentage). Divide by 12 to get your monthly payment. Then get a refinance quote from a conventional lender that includes their closing costs and the new monthly payment. Subtract the new payment from your current payment to find your monthly savings. Divide the closing costs by the monthly savings to find how many months it will take to break even. If that number is longer than you plan to stay in the home, refinancing may not be worth it.
Frequently Asked Questions
Can I remove FHA mortgage insurance early if I pay extra toward the principal?
No. The 11-year waiting period is fixed if you put down 10 percent or more. Paying extra toward principal does not shorten the timeline. However, paying extra does build equity faster, which may help you refinance sooner if you put down less than 10 percent.
What if I refinanced my FHA loan into another FHA loan?
Refinancing into a new FHA loan does not remove mortgage insurance — you simply start a new FHA loan with its own insurance premium. To eliminate insurance, you must refinance into a conventional loan. A loan officer can tell you whether a conventional refinance is possible based on your current equity and credit.
Do I have to request removal, or does it happen automatically after 11 years?
You must request it in writing. The servicer does not remove it automatically. Contact them with your loan number and a statement that you have made 11 years of on-time payments. They have 30 days to respond.
What if my home's value dropped and I no longer have 20 percent equity?
You cannot refinance into a conventional loan without 20 percent equity. If your home's value has dropped, you are stuck with FHA mortgage insurance unless the value recovers or you pay down the loan balance significantly. Some lenders offer refinance programs for underwater borrowers, but these are rare and usually require excellent credit.
Can I remove mortgage insurance if I refinance with the same lender?
Only if you refinance into a conventional loan and have 20 percent equity. Refinancing with the same lender or a different lender makes no difference — the insurance removal depends on the type of new loan and your equity position, not on who is lending.