VA Loan Calculator

VA loans are the only major loan type available today that allows 0% down payment with no monthly mortgage insurance, regardless of the purchase price. For a conventional loan with less than 20% down, lenders require private mortgage insurance (PMI) — typically 0.5–1.5% of the loan amount annually — until your equity reaches 20%. On a $400,000 conventional loan with 5% down, PMI can cost $150–$300 per month for several years. VA-eligible borrowers avoid that cost entirely. Additionally, a conventional borrower putting 5% down on a $400,000 home must bring $20,000 to closing just for the down payment, plus another $8,000–$12,000 in closing costs. A VA borrower can close on the same home with far less cash, financing the funding fee into the loan if needed. This cash preservation is particularly significant for first-time homebuyers who have not had the opportunity to accumulate a large savings cushion. VA rates also tend to run 0.25–0.5 percentage points below conventional rates on average, a difference that adds up to thousands of dollars in interest savings over a 30-year mortgage. The combination of no PMI, no required down payment, and competitive rates makes the VA loan financially superior in almost every scenario compared to conventional financing for eligible borrowers.

The VA funding fee is a one-time charge that helps sustain the VA loan program without requiring taxpayer appropriations for each individual loan. The fee ranges from 1.25% to 3.3% of the loan amount, depending on three factors: whether you are making a first or subsequent use of your VA benefit, your branch of service, and the size of your down payment. For a first-time user with no down payment, the fee is 2.15% — on a $400,000 loan, that equals $8,600. Making a down payment of 5% or more reduces the fee to 1.5%, and 10% or more drops it to 1.25%. The funding fee can be paid at closing or financed into the loan balance, spreading the cost over monthly payments rather than requiring cash upfront. Disabled veterans receiving VA disability compensation, Purple Heart recipients on active duty, and certain surviving spouses are completely exempt from the funding fee — one of the most substantial financial benefits available to this group. If you believe you may qualify for an exemption, confirm your eligibility before closing, since the exemption cannot typically be applied retroactively without a lengthy refund process through the VA.

VA loans carry no prepayment penalty, meaning you can pay additional principal at any time without any financial consequence from the lender. This flexibility makes accelerated payoff strategies particularly effective. The math behind extra payments is compelling: on a 30-year $350,000 VA loan at 6.75%, your standard monthly payment is approximately $2,270. Adding just $200 per month in additional principal reduces your payoff timeline from 30 years to roughly 24.5 years — saving approximately $71,000 in total interest over the life of the loan. The reason extra payments are so powerful early in a mortgage is the amortization schedule: in the first several years, the vast majority of each payment goes toward interest rather than principal. An extra $200 payment in month one eliminates far more future interest than a $200 payment made in year 25. Even occasional lump-sum payments from tax refunds, bonuses, or windfalls applied directly to principal produce meaningful acceleration. Use the Amortization tab to model your specific payoff acceleration scenarios, and consider establishing a small extra payment as a standing automatic transfer to build equity faster without requiring willpower each month.

VA loan benefits are not a one-time entitlement — they can be used repeatedly throughout your life, with some restrictions. After you sell a VA-financed home and pay off the loan in full, your entitlement is fully restored and you can use your VA benefit again on the next purchase. You can even hold two VA loans simultaneously in certain circumstances, such as when you are relocating on military orders and need to keep the existing home. The entitlement system determines how much the VA will guarantee on your loan, which in turn determines whether you need a down payment. Borrowers with full, unimpaired entitlement face no loan limits and no down payment requirement. Those with reduced entitlement may face limits depending on how much guarantee remains. When interest rates drop after you purchase, the Interest Rate Reduction Refinance Loan (IRRRL) — sometimes called a VA streamline refinance — lets you refinance with minimal paperwork, no new appraisal, and reduced closing costs. The IRRRL requires no out-of-pocket expense in most cases and can be completed in as few as 30 days. There is no need to certify your credit score or income again, making it one of the fastest and cheapest refinance products available in the mortgage market.