Does FHA MIP cancel at 10 percent down?

Yes after 11 years per HUD Mortgagee Letter 2013-04 (still in force April 2026). The MIP-for-life rule only applies to FHA loans with under 10 percent down at origination. At exactly 10 percent or more, MIP cancels after 11 years of on-time payments, regardless of LTV.

When does conventional PMI cancel at 10 percent down?

Per HPA 12 USC 4902, conventional PMI cancels automatically at 78 percent LTV. Starting at 90 percent LTV (10 percent down) and assuming 3 percent annual appreciation, automatic cancellation typically happens around year 4 to 5. You may request removal at 80 percent LTV with a current appraisal.

Is FHA at 10 percent down ever better than conventional?

Rarely. The 11-year MIP sunset closes the gap, but conventional PMI typically cancels in year 4 to 5 (vs FHA in year 11). FHA at 10 percent down may still be the right call for borrowers under 660 FICO where LLPAs make conventional more expensive, or for borrowers who need FHA-specific underwriting flexibility.

10% Down: FHA vs Conventional

10% down at origination triggers the FHA 11-year MIP sunset (HUD Mortgagee Letter 2013-04). This is the inflection point where FHA stops being structurally penal. Conventional PMI still cancels earlier in most scenarios, but the gap narrows.

The 11-year rule

Putting 10% down at origination (not later) triggers the FHA MIP 11-year cancellation. Even 9.99% down keeps you in the life-of-loan bucket. Confirm with the lender at application that the loan is set up at the 10% LTV tier.

$300k home at 10% down

Line	FHA	Conventional
Down payment	$30,000	$30,000
Base loan	$270,000	$270,000
UFMIP rolled in	$4,725	$0
Annual MI rate	0.50% (under 95% LTV after 10% down)	0.30 to 0.55% by FICO
MI cancels	Year 11 (HUD ML 2013-04)	Year 4 to 6 at 78% LTV
11-year MI total (720 FICO)	~$13,800 + UFMIP	~$5,400
30-year MI total (720 FICO)	~$13,800 + UFMIP	~$5,400

FHA MIP rate change at 10% down

Per HUD Mortgagee Letter 2024-04, FHA annual MIP depends on base loan amount AND LTV:

Loans at or below $726,200 base: 0.50% annual MIP at LTV at or below 95%, 0.55% at LTV above 95%
Loans above $726,200: 0.70% annual MIP at LTV at or below 95%, 0.75% at LTV above 95%
10% down on a standard loan amount means 0.50% rate, slightly below the 0.55% you would pay at 3.5% down

When FHA at 10% down still loses

Conventional PMI cancels in year 4 to 6 with normal appreciation. FHA waits until year 11. That 5 to 7-year gap of paying MI is the difference.
FHA UFMIP at 10% down is still $4,725 on a $270k loan; conventional has no equivalent upfront fee.
At 740+ FICO, conventional PMI rate drops below FHA annual MIP, so the monthly premium also favours conventional.

When FHA at 10% down may still win

FICO under 660 where LLPAs swamp conventional pricing
Property issues that benefit from FHA 203(k) renovation financing
Recent bankruptcy or foreclosure where FHA seasoning is shorter
FHA loan assumability matters (loan is assumable by qualified buyer if rates rise)

Rate disclaimer

FHA MIP rates may change via future Mortgagee Letters. PMI rates vary by insurer. Consult a licensed loan officer.

Sources

HUD Mortgagee Letter 2024-04 (MIP rates): HUD ML 2024-04
HUD Mortgagee Letter 2013-04 (MIP duration rules): HUD mortgagee letters
HPA 12 USC 4902: 12 USC 4902