The current calculation for up front mortgage insurance (UFMIP) is 2.25% of the loan amount. It is financed within the loan.

Ex: A $100,000 loan will have UFMIP of $2,250. The new loan amount will be $102,250.

The monthly mortgage is currently .55%. The calculation is as follows:

Loan amount: $100,000 x .55% = $550/12 = $45.83.

The monthly mortgage insurance does expire. It will last for at least 5 years or 22% equity, whichever comes last.

*UPDATE: FHA upfront mortgage insurance increased from 1.75% to 2.25% on April 5th, 2010.