What is a VA loan?
A VA loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs for service members, veterans, members of the Reserves and National Guard, and some surviving spouses. Because the VA guarantees part of the loan, lenders usually ask for no down payment and no private mortgage insurance, and rates are often lower than on conventional loans.
Instead of mortgage insurance, most borrowers pay a one-time VA funding fee. This VA mortgage calculator finds the fee from your eligibility, down payment and earlier VA loans, adds it to the loan or treats it as paid at closing, and shows the monthly payment with property tax, insurance and other costs. For a conventional loan, use the mortgage calculator.
How the VA payment is calculated
- Base loan = home price − down payment;
- Funding fee = base loan × fee rate from the chart below;
- Loan amount = base loan + funding fee, if you add the fee to the loan;
- Monthly payment M = P × r × (1 + r)n / ((1 + r)n − 1), where P is the loan amount, r the monthly rate and n the number of payments.
Example: a first-time VA buyer purchases a $500,000 home with no down payment. The funding fee is 2.15%, or $10,750, and with the fee added you borrow $510,750. At 6.76% for 30 years, the payment is $3,316.11 a month. With property tax of 1.2%, insurance of $2,500 a year and $5,000 of other yearly costs, the full monthly cost is about $4,441. There is no monthly mortgage insurance to add.
VA funding fee chart
The fee for a home purchase depends on the down payment and on whether you have used a VA loan before:
| Down payment | First use | After first use |
|---|---|---|
| Under 5% | 2.15% | 3.3% |
| 5% to under 10% | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
- No fee for veterans who receive VA compensation for a service-connected disability, surviving spouses who receive Dependency and Indemnity Compensation, and active-duty service members with a Purple Heart.
- Refinancing: a cash-out refinance costs 2.15% the first time and 3.3% after that; a streamline refinance (IRRRL) costs 0.5%.
- These rates have applied since April 7, 2023. A second VA loan with no down payment costs $16,500 on the example home instead of $10,750.
How the down payment changes the fee
A down payment lowers both the loan and the fee rate. The same $500,000 home at 6.76% for 30 years, first use, with the fee added to the loan:
| Down payment | Fee rate | Funding fee | Loan amount | Monthly payment |
|---|---|---|---|---|
| 0% | 2.15% | $10,750 | $510,750 | $3,316 |
| 5% | 1.5% | $7,125 | $482,125 | $3,130 |
| 10% | 1.25% | $5,625 | $455,625 | $2,958 |
| 20% | 1.25% | $5,000 | $405,000 | $2,630 |
VA payment by home price
With no down payment, a first-use fee of 2.15% added to the loan and a 30-year rate of 6.76%. Property tax and insurance come on top.
| Home price | Funding fee | Loan amount | Monthly payment |
|---|---|---|---|
| $250,000 | $5,375 | $255,375 | $1,658 |
| $300,000 | $6,450 | $306,450 | $1,990 |
| $350,000 | $7,525 | $357,525 | $2,321 |
| $400,000 | $8,600 | $408,600 | $2,653 |
| $450,000 | $9,675 | $459,675 | $2,984 |
| $500,000 | $10,750 | $510,750 | $3,316 |
VA loan requirements
- a Certificate of Eligibility (COE) based on your service;
- the home must be your main residence;
- enough income to cover the payment: lenders look at residual income and often at a debt-to-income ratio up to 41% — check yours with the DTI calculator;
- the VA sets no minimum credit score, but most lenders ask for 580 to 620 or higher;
- with full entitlement there is no VA loan limit; lenders still decide how much you can borrow.
To see what price fits your income under the VA guideline, choose the VA option in the house affordability calculator.
VA loan vs. FHA and conventional loans
- Down payment: VA from 0%, FHA from 3.5%, conventional from 3%.
- Mortgage insurance: none on a VA loan; FHA charges upfront and annual MIP, conventional loans charge PMI below 20% down.
- Upfront cost: the VA funding fee, unless you are exempt; FHA charges 1.75% upfront MIP.
Compare the payments with the FHA loan calculator. If rates fall after you buy, a VA streamline refinance can lower the payment — the refinance calculator shows when it pays off.