FHA → Conventional Refi Savings
Most FHA borrowers pay MIP (FHA mortgage insurance) for the life of the loan. Once you have 20% equity, refinancing into a conventional loan can drop the insurance — sometimes a few hundred dollars a month. We compute monthly savings, break-even months, and lifetime interest impact against a conventional refi at your quoted rate.
What you still owe on your FHA loan.
Recent appraisal, automated estimate (AVM), or market estimate — used to compute LTV (loan-to-value).
Your existing FHA note rate.
The mortgage insurance line item on your FHA statement.
Years left until your current FHA loan is paid off.
The rate you've been quoted on a conventional refinance.
Lender + title + escrow at close.
How long you expect to stay in the home — determines whether closing costs are worth it.
Length of the new conventional loan.
A clear refinance win · $377 / mo vs current FHA
$1,709 new monthly payment (conventional)
- New P&I (principal and interest)
- $1,709
- No PMI
- $0
- Monthly savings
- $377
- Break-even
- 17 mo
- Lifetime savings (7-yr hold)
- $25,203
- LTV (no PMI needed)
- 69.2%
Free during pilot
How this is calculated
Your current FHA payment is the standard amortization on your remaining balance plus the monthly MIP from your statement. The conventional payment uses the same balance refinanced at your new rate over the new term. If your loan-to-value ratio is above 80%, we add a rough conventional PMI estimate (0.5%–1.2% of balance per year, depending on LTV).
Break-even is closing costs divided by the monthly savings. Lifetime savings is monthly savings times your stated hold period in months, minus the closing costs. The chart shows your cumulative position month by month — below zero means you're still recovering closing costs; above zero means real savings.
The MIP permanence rule
For FHA loans closed after June 3, 2013:
- Original LTV ≥ 90% — MIP is permanent. Refinancing is the only exit.
- Original LTV < 90% — MIP auto-terminates at month 132 (year 11). Refinancing captures savings sooner than waiting.
Pre-2013 FHA loans use a different regime (5-year minimum + 78% LTV) that this calculator doesn't encode — talk to a licensed broker.
When this estimate is wrong
- You made principal-only payments not reflected in standard amortization.
- Your closing costs are higher than 2.5% of the balance (transfer taxes and title fees stack quickly in some states).
- The new conventional loan would itself trigger PMI — we flag this when current value puts you above 80% LTV.
- Your servicer has already auto-terminated MIP because original LTV was < 90% and you've crossed year 11.
The other PMI calculator
If you have a conventional loan with regular PMI (not FHA's MIP), use the PMI Removal calculator instead — that path doesn't require refinancing.
Frequently asked questions
Why can't I just cancel FHA mortgage insurance the way I can with conventional PMI?
FHA's mortgage insurance — called MIP — works differently from conventional PMI. For most FHA loans closed after June 3, 2013 with a down payment below 10%, MIP runs for the entire life of the loan. The only way to remove it is to refinance into a conventional loan. This calculator estimates whether the savings from doing that outweigh the refinancing costs.
What does 'break-even months' mean in this calculator?
Break-even is the number of months it takes for the monthly savings from refinancing to pay back what you spent on closing costs. If closing costs are $5,000 and you save $200 per month, you break even in about 25 months. After that point, you're ahead — as long as you stay in the home. If you move or refinance again before break-even, you may not come out ahead.
Will I have to pay PMI on the new conventional loan?
It depends on your loan-to-value ratio after refinancing. If your loan balance is below 80% of the home's current value, you won't need conventional PMI. If it's above 80%, the new conventional loan will carry PMI until you pay down to that threshold. This calculator flags that scenario automatically and includes an estimated PMI cost in the new payment.
Are the savings figures in this calculator guaranteed?
No — these are estimates based on the numbers you enter. Your actual rate will depend on your credit score, debt-to-income ratio, and the market on the day you lock. Closing costs vary by state and lender. The calculator is a planning tool to help you decide whether to have the conversation with a licensed mortgage professional, not a quote.
Estimates only — not a quote. Actual rates depend on credit, debt-to-income, and lender pricing on the day you lock. Conventional loans require PMI (private mortgage insurance) when LTV is above 80% — we factor that in automatically based on your inputs. Closing costs vary by state and program. TrueOwn outputs are estimates and drafts, not legal or financial advice. Methodology last reviewed: April 29, 2026.