FHA-to-conventional refinance
If you bought with FHA after 2013 with less than 10% down, your MIP runs for the entire life of the loan — not removable, regardless of how much equity you build. Refinancing to conventional ends MIP at signing if your current loan-to-value is ≤ 80%. Usually possible 3-5 years post-purchase if your home appreciated. This calculator shows you the exact dollar savings, including the honest term-reset trade-off.
Last updated 2026-05-13
- Finish current FHA
- $348,936
- Refinance to conventional
- $353,515
- Lifetime delta
- +$4,578
MethodologyThe FHA-specific refi math (and the term-reset trap)
The FHA-specific refi math (and the term-reset trap)
The lifetime-MIP rule:FHA loans originated after June 2013 with LTV at origination > 90% carry annual MIP for the entire loan term. Most FHA buyers put 3.5% down (96.5% LTV) → 30 years of MIP payments, even after equity exceeds 20%. Refinancing to conventional is the ONLY way out, and it works only if your current LTV is low enough to skip PMI.
The 80% LTV threshold:conventional lenders waive PMI on new originations at LTV ≤ 80%. Your current LTV depends on (a) what you still owe, and (b) what your home is currently worth. Home appreciation is what usually moves the needle — a $400k purchase that's now worth $475k with $300k remaining is at 63% LTV, comfortably under the 80% threshold.
Math we run:compute new monthly P&I via standard amortization on the same remaining balance at the new rate over the new term. Compute new monthly PMI based on new LTV (0 if ≤ 80%, tiered up to 1.25% if 80-95%). Total monthly savings = (current P&I + MIP) − (new P&I + PMI). Break-even = closing costs / monthly savings.
Lifetime costaccounts for: remaining P&I interest if you finish the current loan + remaining MIP payments. Compared against: new loan's total P&I interest + closing costs + new loan's lifetime PMI (which is 0 if eliminated). The lifetime-delta number is the honest answer — even MIP-elimination can lose lifetime if the term resets far enough.
The term-reset trap: refinancing from 25 years remaining to a fresh 30-year adds 5 years of interest accrual. Even at a lower rate + MIP eliminated, this can flip total lifetime cost positive. The calculator surfaces this when it occurs. Match your remaining term (e.g. 25-year refi on 25 years remaining) to avoid the trap entirely — at modest rate-delta refi cases, this is often the cleanest win.
FHA streamline refi(also called "FHA-to-FHA refi") is a separate path not modeled here. It skips appraisal and doesn't require a new credit pull, but keeps you on FHA — so MIP continues. Useful only when conventional refi isn't available (LTV still too high) and rates have dropped enough to make even the same-program refi worth it.
What we deliberately don't model: upfront-MIP refund (FHA refunds a fraction of upfront MIP when you refi out within 3 years — varies by month-of-origination, see FHA Handbook 4000.1 § II.A.8.d for the exact schedule); cash-out refi (substantially different math + tax consequences); seller-paid concessions; jumbo conventional (above $806,500 conforming limit; PMI math differs); FHA 203(k) renovation loans.
How to know your numbers: current monthly MIP is on your statement as a separate line. Current balance is on the same statement. Current home value is best estimated via Zillow / Redfin / Realtor.com Zestimates — or get a pre-refi appraisal ($400-$600) before committing if LTV looks borderline. Conventional refi rates are available from any broker quote or rate aggregator.