In order for lenders to protect themselves against losses that come from home mortgage defaults, lenders require that borrowers get a mortgage insurance policy. The FHA requires both upfront and annual mortgage insurance for all borrowers, regardless of the amount of down payment. The FHA MIP (Mortgage Insurance Premium) is paid by the borrower to the FHA as part of the FHA mortgage program. FHA MIP is paid in two ways – upfront at closing and annually in 12-month installments. The current up-front MIP (UPFMIP) fee is 1.75% of the borrowed amount. The typical annual MIP fee is 0.85% of the borrowed amount.