Whether or not you need to pay a mortgage insurance premium (MIP) depends on the terms of your loan. Down payment amounts dictate the need for mortgage insurance premiums, which influence monthly payments — and the amount due at closing. All Federal Housing Authority (FHA) mortgages require borrowers to pay an upfront mortgage insurance premium, known as UFMI, at closing in addition to an annual premium for the life of the loan. The upfront premium costs 1.75% of the loan amount, and the annual mortgage insurance premium runs between 0.45% to 1.05%. If you made a down payment of less than 10%, you’re responsible for paying the annual premium in monthly installments over the life of the loan. If you put down over 10%, the requirement to pay the annual premium ends after 11 years.