VA Loan Calculator
Calculate VA loan payments with 0% down payment option and VA funding fee for eligible veterans and service members.
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How It Works
VA loans are mortgage loans guaranteed by the U.S. Department of Veterans Affairs. They offer significant benefits to eligible veterans, active-duty service members, and surviving spouses: no down payment required, no PMI, competitive interest rates, and limited closing costs. The main cost is the VA funding fee, which can be financed into the loan.
The Formula
Total Loan = Base Loan + Funding Fee
Monthly Payment = standard amortization on Total Loan
Variables
- Funding Fee — One-time fee paid to the VA: 2.15% first use (0% down), 3.30% subsequent use (0% down)
- Down Payment — Optional for VA loans; 5%+ down reduces the funding fee
- Exemption — Veterans with service-connected disabilities are exempt from the funding fee
Worked Example
A veteran buying a $350,000 home with 0% down on first use: Funding fee = $350,000 x 2.15% = $7,525. Total loan = $357,525. At 6% for 30 years, monthly payment = $2,143. No PMI is required. A conventional buyer would need $70,000 down to avoid PMI.
Practical Tips
- VA loans have no PMI regardless of down payment, saving you $100-$300/month compared to conventional loans with less than 20% down.
- The funding fee can be financed into the loan, so you do not need to pay it upfront.
- Putting 5% or more down significantly reduces the funding fee from 2.15% to 1.50%.
- Veterans with a service-connected disability rating are completely exempt from the funding fee.
- VA loans can be used multiple times. Your entitlement can be restored when you pay off or sell the previous VA-financed home.
Frequently Asked Questions
Who is eligible for a VA loan?
Veterans, active-duty service members, National Guard and Reserve members with qualifying service, and surviving spouses of veterans who died in service or from a service-connected disability. Specific service length requirements vary.
Is there a VA loan limit?
For veterans with full entitlement (no active VA loan), there is no loan limit as of 2020. For those with reduced entitlement, county-level conforming limits apply. You can borrow above the limit with a down payment on the difference.
What is the VA funding fee?
The funding fee is a one-time payment to the VA that helps sustain the program. For first-time use with 0% down, it is 2.15% of the loan amount. For subsequent use with 0% down, it is 3.30%. Higher down payments reduce the fee. It can be financed into the loan.
Can I use a VA loan for an investment property?
No, VA loans are for primary residences only. However, you can buy a multi-unit property (up to 4 units) as long as you live in one of the units.
Do VA loans have lower interest rates?
Yes, VA loans typically have rates 0.25-0.50% lower than conventional loans because the VA guarantee reduces lender risk. This can save thousands of dollars over the life of the loan.