Does FHA mortgage insurance affect APR?
Yes. UFMIP and annual MIP are both included in the APR calculation, which is why FHA APR usually looks meaningfully higher than the note rate.
Plain-English explanation
Note rate is the cost of borrowing. APR adds certain finance charges — UFMIP, annual MIP, lender fees, and prepaid finance charges — to give a comparison number. APR is a useful comparison only when the assumptions match across quotes.
What can change the answer?
Loan term, LTV at origination, HUD's published MIP schedule at the time of origination, and refinance options can change the long-term cost.
Want the real answer for your file?
FHA guidelines are the rule. Your credit, income, payment, property, and county limit are what decide the actual answer.
More FHA questions on Mortgage Insurance
Educational only. FHA guidelines, lender overlays, rates, fees, and underwriting requirements can change. Final eligibility depends on full underwriting review.