Do VA loans have mortgage insurance?

No, and this is the central benefit. Conventional loans charge private mortgage insurance below twenty percent down, FHA charges a premium that frequently never cancels, and VA charges neither at any deposit. In place of it there is a one-time funding fee which can be financed into the loan, and which a substantial minority of borrowers do not owe at all. Over thirty years the difference against FHA on a typical purchase runs to tens of thousands.

Who is exempt from the VA funding fee?

Anyone receiving compensation for a service-connected disability, at any rating — there is no minimum percentage, and a ten percent rating exempts you as completely as a hundred. Also exempt are veterans entitled to compensation who take retirement or active duty pay instead, surviving spouses receiving dependency and indemnity compensation, and serving members who have received the Purple Heart. Your Certificate of Eligibility states which applies. It is worth checking before anything else, because on a typical purchase it is worth several thousand dollars.

How much is the VA funding fee?

On a purchase it is 2.15% for a first use with less than five percent down, 3.30% for a subsequent use at the same deposit, and 1.50% or 1.25% at five and ten percent down respectively for either. A streamline refinance is 0.50% and an assumption the same. These rates took effect in April 2023 and are fixed by statute until November 2031, which makes them unusually stable — most figures in mortgage lending move annually.

Should I put money down on a VA loan?

Rarely, and the arithmetic is unusual. Putting five percent down cuts the fee rate from 2.15% to 1.50%, which is a genuine saving; putting four percent down changes the rate not at all. So a partial deposit below five percent is doing very little, while the five percent threshold itself is worth reaching if you are close. Beyond ten percent the rate stops improving entirely. Against all of that sits the fact that VA is the only programme that will lend the whole price, and cash retained is cash available for everything else a new house demands.

What is residual income and why does it matter?

It is what remains each month after every obligation — the housing payment, all other debts, and an allowance for utilities and maintenance — and it is what VA genuinely underwrites to. Two things make it unusual. It uses take-home pay rather than gross, unlike every debt-to-income rule elsewhere. And it is a floor rather than a ratio, set by a published table that varies with region, household size and loan amount. A file with strong residual income routinely passes at ratios that would end a conventional application, and a file that fails it does not proceed however good the ratio looks.

Are there VA loan limits?

Not for borrowers with full entitlement, which is most people using the benefit for the first time. Limits were removed in 2020, so the constraint is what a lender will approve rather than a statutory cap. Where entitlement is partly used — typically because another VA loan is outstanding — county limits do come back into play and determine how much the guaranty covers, which in turn shapes the deposit a lender will want. Anyone in that position should get their Certificate of Eligibility read properly before house-hunting.

Can I use a VA loan more than once?

Yes, the benefit is not a one-off. What changes is the fee: a subsequent use with nothing down costs 3.30% rather than 2.15%, which on a $420,000 purchase is about $4,800 more. Note that subsequent use means having used the benefit before at all, even if that loan was repaid years ago and the house sold. Entitlement can also be restored once a previous VA loan is paid off, and in some circumstances two VA loans can run at once — both are worth asking about rather than assuming.

Can I get the funding fee back?

Sometimes, and it is claimed less often than it should be. Where a disability rating is granted with an effective date before your loan closed, the fee you paid is refundable — which happens regularly, because claims take months to decide while house purchases do not wait. If you had a claim pending at closing and it was later approved retroactively, contact the VA regional loan centre and ask. The refund is not automatic and nobody will prompt you.

How do VA loans compare to conventional and FHA?

On cost, VA wins decisively for anyone eligible. It needs no deposit, charges no recurring insurance, and typically prices its interest rate below the alternatives. The trade-offs are practical rather than financial: a VA appraisal applies minimum property requirements that can complicate older houses, some sellers in competitive markets prefer conventional offers on the belief they close more easily, and the property must be your principal residence. None of those outweighs the cost difference for most eligible buyers.

Can the seller pay my closing costs?

Yes, and VA is relatively generous here. Seller concessions are capped at four percent of the value established by the appraisal, and that four percent can cover the funding fee, prepaid items and even paying off a buyer debt — a wider definition than most programmes allow. Ordinary closing costs paid by the seller sit outside the four percent cap altogether. In a slower market this is worth negotiating hard, because it can remove almost all of the cash needed to close.

VA Loan Calculator

The VA loan is the only programme on this site with no mortgage insurance at all. Not insurance that cancels at eighty percent, not insurance that runs eleven years, not insurance for the life of the loan — none. What replaces it is a one-time funding fee, and the first thing worth establishing is ...

THE LOAN

PURCHASE PRICE ($)

DEPOSIT (%) — OPTIONAL

RATE (%)

TERM (YEARS)

Check whether you are exempt before anything else — it is worth $9,030 here. Anyone drawing compensation for a service-connected disability pays no funding fee at all, at any rating, with no minimum percentage. So do those eligible for compensation who take retirement pay instead, surviving spouses receiving dependency and indemnity compensation, and serving Purple Heart recipients. Your Certificate of Eligibility says which applies.

MORTGAGE INSURANCE ON A VA LOAN

There is none, at any deposit, ever — that is the whole point of the programme. In its place sits a one-time funding fee of 2.15%, which is $9,030 and can be financed into the loan. Conventional and FHA borrowers pay their insurance every month instead.

FUNDING FEE

$9,030

TOTAL BORROWED

$429,030

PAYMENT

$2,641.61

Against the alternatives, on the smallest deposit each allows. A conventional loan at five percent down costs $26,396 of insurance before it cancels, and needs $21,000 of deposit. FHA at 3.5% costs $51,492, because its premium never cancels at that deposit, and needs $14,700. VA costs $9,030 once and needs no deposit. The gap is $17,366 and $42,462.

Purchase price

$420,000

Deposit

Base loan

$420,000

Funding fee rate

2.15%

Funding fee

$9,030

Total borrowed

$429,030

Principal and interest

$2,641.61

Mortgage insurance

none, ever

Conventional would cost

$26,396

FHA would cost

$51,492

Residual income

$3,136

Requirement entered

$1,003

This is an estimate, not a quote. The comparison assumes the alternatives carry slightly higher rates than VA, which is usual but not guaranteed, and prices their insurance on the declining balance. It does not model entitlement, which matters if you have a VA loan outstanding, or the funding fee refund available where a disability rating is granted retroactively — that one is worth chasing, since it can be claimed after closing. Your Certificate of Eligibility and a lender are the authorities on both.

THE BENEFIT

The bars are not comparing like for like, and that is the point. Each programme is shown on the smallest deposit it permits, because that is the real choice a buyer faces. VA asks for no deposit and charges nothing recurring; the other two ask for cash at the table and then charge every month on top.

Live calculation · updates as you type

Created with❤️byeaglecalculator.com

HOW TO USE

1
Check the exemption first. It is the single largest number on the page and it turns on your Certificate of Eligibility rather than anything you enter here.
2
Leave the deposit at zero unless you have a reason. VA is the only programme that lends the whole price, and cash kept is cash available for everything else.
3
If you are putting money down anyway, note the step at five percent. Below it the rate is the same as nothing down, so a deposit of four percent buys nothing the fee cares about.
4
Open the residual income section and enter your take-home pay rather than gross. Ask your lender for the requirement that applies to your region and household — it is a published table and they will have it.

FREQUENTLY ASKED QUESTIONS

RELATED CALCULATORS

Mortgage Comparison Calculator

Calculate instantly →

Monthly Mortgage Payment Calculator

Calculate instantly →

Mortgage Qualification Calculator

Calculate instantly →

Biweekly Mortgage Payment Calculator

Calculate instantly →

MORE MORTGAGE CALCULATORS

Monthly Mortgage Payment Calculator

Calculate instantly →

Mortgage Affordability Calculator

Calculate instantly →

Mortgage Refinance Calculator

Calculate instantly →

Rent vs Buy Calculator

Calculate instantly →

30-Year Mortgage Calculator

Calculate instantly →

UK Stamp Duty Calculator (SDLT)

Calculate instantly →

Mortgage Amortization Schedule

Calculate instantly →

Australia Stamp Duty Calculator

Calculate instantly →

Down Payment Calculator

Calculate instantly →

15 vs 30 Year Mortgage Calculator

Calculate instantly →

15-Year Mortgage Calculator

Calculate instantly →

Closing Costs Calculator

Calculate instantly →

HELOC Calculator

Calculate instantly →

Home Equity Calculator

Calculate instantly →

LTV Ratio Calculator

Calculate instantly →

PMI Calculator

Calculate instantly →

Reverse Mortgage Calculator

Calculate instantly →

FHA Loan Calculator

Calculate instantly →

Jumbo Loan Calculator

Calculate instantly →

Was this calculator helpful?

Last updated: July 31, 2026 · Funding fee rates fixed by statute through November 2031 · Residual requirement varies by region and household · Estimate only.