VA Loan Calculator

How Does a VA Loan Work?

VA loans are government-backed mortgages available to eligible veterans, active-duty service members, and surviving spouses. Enter the home price, down payment, interest rate, and term in the calculator above to see the loan amount, monthly payment, VA funding fee, and confirmation of no PMI requirement. The VA loan program offers three advantages unavailable in any other mortgage: zero down payment, no private mortgage insurance, and competitively low interest rates, making it arguably the most valuable mortgage benefit in existence.

VA Loan Eligibility Requirements

Active duty: 90 consecutive days during wartime or 181 days during peacetime. Veterans: met the active duty service requirement and were honorably discharged. National Guard/Reserves: 6 years of service, or 90 days of activation under federal orders. Surviving spouses: unmarried spouse of a service member who died in service or from a service-connected disability. Obtain your Certificate of Eligibility (COE) through the VA (eBenefits portal), your lender, or by mail using VA Form 26-1880. Most lenders can pull the COE electronically within minutes during the loan application process.

Zero Down Payment: The Signature VA Benefit

VA loans require no down payment on homes up to the conforming loan limit ($766,550 in most areas, higher in expensive markets). A $350,000 home with $0 down: entire $350,000 financed. A conventional loan on the same home at 5% down: $17,500 upfront, $332,500 financed. At 20% down: $70,000 upfront. The zero-down feature eliminates the largest barrier to homeownership - accumulating a down payment that takes most first-time buyers 3-7 years to save. Veterans can use this benefit immediately upon eligibility, accelerating the timeline to homeownership by years compared to saving for a conventional down payment.

No PMI: Saving Hundreds Per Month

Conventional loans with less than 20% down require private mortgage insurance costing 0.5-1.5% of the loan annually. On a $350,000 loan at 0.8% PMI: $233/month in insurance payments until reaching 20% equity. VA loans never require PMI regardless of the down payment amount (including zero down). Over the years before reaching 20% equity (typically 7-10 years): $233/month x 96 months = $22,368 saved versus a conventional loan with PMI. This savings alone represents a significant financial advantage that compounds with the zero-down benefit.

VA Funding Fee: The One-Time Cost

VA loans charge a one-time funding fee that funds the VA loan program. First-time use with $0 down: 2.15% of the loan amount. Subsequent use: 3.3%. With 5% down: 1.5% (first use). With 10% down: 1.25%. Exempt from the funding fee: veterans receiving VA disability compensation, Purple Heart recipients on active duty, and surviving spouses. On a $350,000 loan with no down payment (first use): funding fee $7,525, typically financed into the loan making the total $357,525. Despite this fee, the VA loan total cost is almost always less than a conventional loan with PMI over the same period.

VA Loan Interest Rates

VA mortgage rates are typically 0.25-0.5% lower than conventional rates because the government guarantee reduces lender risk. A borrower quoted 6.75% conventional might receive 6.25-6.50% VA. On a $350,000 loan for 30 years: the 0.5% rate difference saves $112/month and $40,237 over the loan life. Combined with no PMI and no down payment, the VA loan produces both the lowest initial cost and the lowest ongoing monthly cost of any major mortgage program. Veterans who qualify for VA loans and choose conventional financing instead are leaving significant money on the table.

VA Loan Limits and Entitlement

For veterans with full entitlement (no active VA loan outstanding): there is no loan limit for zero-down VA loans. You can purchase a $1 million home with $0 down if you qualify on income and credit. For veterans with reduced entitlement (existing VA loan in use): the 2024 conforming limit ($766,550 in most areas) applies to the guaranteed portion. Above this amount, a partial down payment may be required. VA entitlement can be restored when a VA loan is paid off (through sale or refinancing), allowing reuse of the benefit multiple times throughout a military career and beyond.

VA Loan for Investment vs Primary Residence

VA loans are restricted to primary residences - you must intend to occupy the home. However, several strategies allow building wealth through VA loans. Live-in then convert: buy a home with a VA loan, live in it for the required occupancy period (typically 12 months), then convert it to a rental when you PCS (permanent change of station) or move. Your VA entitlement may be restored for a new purchase if the remaining entitlement covers the new loan, or fully restored when the first property is sold. Multi-unit properties: VA loans allow purchase of 1-4 unit properties as long as you occupy one unit. A duplex or fourplex purchased with zero down produces rental income from the non-occupied units while you live in the property, combining homeownership with investment income.

Frequently asked questions