Use this VA loan calculator to estimate your monthly mortgage payments. Simply insert your military status, purchase price, downpayment and any tax and homeowner’s insurance information, if you have that information handy.
How Do You Use This VA Loan Calculator?
All calculators are only as good as the information you put into them, so the more accurate the information you provide, the more accurate your results will be.
Be sure to pay attention to the military details. Some factors, such as having a VA disability rating or a Purple Heart, will exempt you from having to pay the VA loan funding fee, which will save you a lot of money on your home purchase.
Property Taxes and Insurance: You have two choices if you don’t know the amounts for your property taxes and homeowners taxes:
- You can leave these out.
- You can make an educated guess.
Option one is good if you are simply comparing rates from different VA loan companies. Just remember that you will need to add these back in to understand what your monthly mortgage payment will be.
Option two is fine if you have a rough idea of what these will be, even if you don’t have the exact numbers. Keep in mind that you will need to account for these in your final mortgage payment.
What Makes Up Your Monthly Mortgage Payment?
Your mortgage payment will include your mortgage principal and interest payments. Many lenders also require borrowers to include an escrow payment that includes monthly payments for property taxes and homeowners insurance.
Other buying costs may or may not be rolled into your mortgage. You may have the option to pay these costs at closing. If so, the numbers on the mortgage calculator will be accurate. However, if you choose to roll these into your mortgage, these costs would be included in your mortgage principal and interest payments.
Some of these costs include:
- Closing costs
- Origination fees
- VA loan funding fee (if required)
Closing Costs. Many closing costs are unavoidable and can include items such as the application fee, VA appraisal fee, prepaid interest, credit report, inspection fees, title search and/or title insurance, document fees, attorney’s fees, surveys, government fees, recording fees, buying points and related costs. Learn more about VA loan closing costs.
Origination Fees. Many lenders charge an origination fee to cover the administrative costs of processing and underwriting the VA loan. The VA limits the cost of the origination fee to no more than 1% of the loan.
VA Loan Funding Fee (if required). See below for more info.
What is the VA Loan Funding Fee?
The VA charges a funding fee from borrowers to help cover the cost of the VA loan program. The VA funding fee is waived for veterans with a VA service-connected disability rating, current service members with a Purple Heart and surviving spouses of a veteran who died in service or from a service-connected disability.
The funding fee is based on the type of transaction (purchase, refinance or loan assumption), the amount of your down payment (if any) and the number of times you have used a VA loan.
Homebuyers have the option of paying the VA funding fee at closing or rolling it into their home purchase. This article has more information about the VA loan funding fee.
Here are the current funding fees:
| Type of Loan | Down Payment | Funding Fee First Time Use | Funding Fee Subsequent Use |
|---|---|---|---|
| Purchase / Construction Loan | 0% | 2.15% | 3.3% |
| Purchase / Construction Loan | 5% | 1.5% | 1.5% |
| Purchase / Construction Loan | 10% | 1.25% | 1.25% |
| VA Cash-Out Refinance | N/A | 2.15% | 3.3% |
| IRRRL Streamline Refinance | N/A | 0.5% | 0.5% |
| VA Loan Assumption | N/A | 0.5% | 0.5% |
Why Do Interest Rates Matter?
Today’s interest rates are generally lower than they were a few years ago. But that doesn’t mean you should accept the first reasonable interest rate you find. You should shop around, and compare VA loan interest rates to find the best deal for your situation.
Even a small change in the interest rate can have a large impact over the course of a 15- or 30-year loan.
Check out the difference in monthly payments just by changing the interest rate by half a percentage point.
The following table assumes a $250,000 mortgage, no VA loan funding fee, $200 per month property taxes and $100 a month in homeowners insurance. You can adjust the details as needed.
What a difference half a percentage point makes!
| Comparing 15-Year Mortgage Interest Rates ($250,000 Loan; No Downpayment) | 3.50% | 4.00% | 4.50% | 5.00% |
|---|---|---|---|---|
| Monthly mortgage payment | $1,787.21 | $1,849.22 | $2,215.48 | $1,976.98 |
| PMI (none required with VA loan) | $0.00 | $0.00 | $0.00 | $0.00 |
| Property taxes (per month) | $200.00 | $200.00 | $200.00 | $200.00 |
| Homeowners insurance (per month) | $100.00 | $100.00 | $100.00 | $100.00 |
| Total monthly payment | $2,087.21 | $2,149.22 | $2,212.48 | $2,276.98 |
| Total annual payment amount | $25,046.48 | $25,790.64 | $26,549.80 | $27,323.81 |
| Total interest paid (life of loan) | $71,697.14 | $82,859.57 | $94,246.98 | $105,857.13 |
| Total of 180 payments | $375,697.14 | $386,859.57 | $398,246.98 | $409,857.13 |
What Factors Impact Your Interest Rate?
Banks use many factors to determine the interest rate on your mortgage. The first and most important factor is the underlying market conditions. As a homebuyer, you have no control over this factor. In short, banks can only borrow money at certain rates, which vary daily. Those costs get passed on to the customer.
However, there are factors you can control, such as your credit score, the amount of your down payment (if any), the type of home loan you use, the amount of money you borrow, whether or not you buy points on your mortgage and sometimes other factors.
How Can You Lower Your Interest Rate?
Some lenders have different interest rates for different types of loans. For example, some lenders offer better rates on VA loans compared to conventional mortgages. Some lenders may also feature different interest rates for jumbo loans versus conforming loans.
Your credit score is arguably one of the most important factors you can control. In general, the higher your credit score, the lower your credit risk, and the greater your ability to secure a lower interest rate.
Finally, buying discount mortgage points on your loan may allow you to secure a lower interest rate. When you buy points, you reduce the interest rate on your loan. In effect, you are prepaying a portion of the loan to secure a better interest rate. You can generally buy a point at the rate of 1% of your loan. So buying a point on a $250,000 mortgage would usually cost $2,500*. This payment can be made at closing, or it can be rolled into your loan. (*This is an example; different lenders have different rules, so be sure to check with your lender when getting a VA loan quote or when applying for a loan.)
Be sure to run the numbers to make sure buying points will pay off in the long run.
How Does Your Credit Score Impact The Interest Rate?
Finally, we need to address credit scores again. We cannot stress enough how important your credit score is when you are getting a loan. Your credit score is a direct reflection of how lenders view you as a financial risk. The lower your risk, the more likely you are to get a favorable interest rate.
Where Can You Find the Best VA Loan Rates?
The best advice I can offer is to shop around. Market conditions change on a daily basis, so the quote you get today may be different from the quote you get tomorrow. When I bought our last home, I shopped rates with almost 10 lenders, including some of the larger VA loan providers, as well as some local lenders.
I ended up using Veterans United for my VA loan, and I highly recommend starting with them for a quote. But you should also shop around with several companies to ensure you get the best rate for your situation.
Here are some recommended VA loan providers:
Good luck with your next VA loan!
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