VA Mortgage Calculator

The VA Funding Fee is a one-time charge on most VA-backed home loans that helps keep the program running at no cost to taxpayers. Since the VA does not lend money directly — it guarantees a portion of the loan to the private lender so the borrower can put nothing down and skip private mortgage insurance — the funding fee covers expected losses on the guarantee. The rate is set by Congress: as of the current schedule (which runs through Sep 30 2031 under Public Law 116-23), first-use borrowers pay 2.15% on loans with less than 5% down, 1.50% at 5 to 9.99% down, and 1.25% at 10% or more down. Subsequent users pay 3.30% on under-5%-down loans and the same 1.50% / 1.25% at the higher down brackets. Borrowers receiving VA disability compensation, Purple Heart recipients, and qualifying surviving spouses are exempt and pay no funding fee.

Three main groups are exempt. First, veterans receiving or entitled to receive VA disability compensation — including veterans who would receive it if they were not getting retirement pay. Second, active-duty service members who have received the Purple Heart. Third, surviving spouses of veterans who died in service or from a service-connected disability, if they are eligible for the VA home loan benefit on that basis. Some service members with a pre-discharge proposed or memorandum rating of compensable disability also qualify. The exemption is automatic once VA confirms eligibility — you do not need to apply separately. Select Exempt in the funding fee field to model the payment without the fee.

No. It computes the monthly principal-and-interest payment only. VA loans do not require private mortgage insurance even with zero down, so PMI never appears in a VA payment, but property tax, homeowners insurance, and HOA dues do. To estimate the full monthly housing cost (often called PITI for principal, interest, tax, insurance, or PITIA when HOA is added), take the calculator output, then add monthly property tax (annual bill ÷ 12, which varies wildly by state — Texas, New Jersey, and Illinois are high; Hawaii, Alabama, and Colorado are low), homeowners insurance (typically 50 to 200 USD per month depending on location and coverage), and any HOA dues. A common rule of thumb is to budget an extra 1.0 to 1.5% of the home value per year for tax + insurance combined.

For an eligible borrower with a strong service record and moderate income, a VA loan is usually the cheapest financing available. The headline advantages are zero down payment, no private mortgage insurance, and slightly lower interest rates than conventional or FHA — typically 25 to 50 basis points lower at origination. The funding fee offsets some of that benefit, especially on a subsequent-use no-down loan where the 3.30% fee on a 400,000 USD loan adds 13,200 USD to the balance. FHA still requires a down payment (3.5%) and charges both an upfront mortgage insurance premium and an annual MIP that runs for the life of the loan in most cases, so the running cost is generally higher. Conventional loans require either 20% down to avoid PMI or PMI premiums until you reach 78% LTV. Run the numbers on this calculator and a conventional/FHA equivalent for the same purchase price to see which is cheaper over your expected holding period.

Financing the fee is the default and what most borrowers do, because it requires no extra cash at closing — VA loans are designed for zero-down purchases. The trade-off is that the fee earns interest at the loan rate for the full term. On the 6,450 USD funding fee in our 300,000 USD example at 6.5%, financing it costs about 8,200 USD in interest over 30 years (the fee plus interest minus the fee itself), so the all-in cost of the fee rises from 6,450 USD to roughly 14,650 USD if held to maturity. Paying cash at closing avoids that. Most borrowers finance anyway because the cash is more useful in reserves, on closing costs, or for moving expenses, and because most do not hold the loan to maturity — they refinance or sell well before the 30-year mark. To model the cash-paid case in this calculator, set the funding fee category to Exempt; the calculator removes the fee from the loan balance and shows the payment on the base loan only.

Yes. The VA loan benefit is a lifetime entitlement and you can reuse it as many times as you qualify. Two common cases. First, you have paid off the prior VA loan in full (sold the home and cleared the loan, or paid it down to zero) — your full entitlement restores and the next loan is treated as first use at the 2.15% / 1.50% / 1.25% schedule. Second, you still have a prior VA loan outstanding but enough remaining entitlement to back a new loan on a second property — the new loan is a subsequent use at the 3.30% rate on under-5%-down purchases, dropping to 1.50% / 1.25% at higher down brackets. The subsequent-use bump only applies to under-5%-down loans, which is one reason borrowers reusing the benefit often put 5% or 10% down — it cuts the funding fee from 3.30% to 1.50% or 1.25% and the savings on a typical loan dwarf the smaller monthly payment difference.