VA Loan Interest Rates

Ideal for eligible armed forces personnel and their spouses >>

Strong Home Mortgage averages 4.8☆ across 6,000+ reviews

Overview

The US government established the Veterans Administration (VA) loan program in 1944 to assist troops returning from WWII with an easier path to homeownership. Today, VA loans are guaranteed by the US Department of Veterans Affairs and remain one of the most valuable perks for eligible veterans, active duty servicemembers, reservists, and surviving spouses. Benefits include competitive VA loan interest rates, zero down payment options, and streamlined refinancing with no mortgage insurance premium (MIP). In some cases, a VA loan includes funding fee waivers. VA loans typically offer easier qualification standards. The guaranty is a lifetime benefit.

Reading Time

12 mins | EMAIL US with questions

Features vs. Conventional

Compared to conventional loans, VA Loans typically have:

  • Lower interest rates
  • Lower closing costs

Other Features

Other features include:

  • No down payment¹
  • No maximum loan amount
  • No private mortgage insurance

Topics Below

I. Eligibility Requirements
II. Key Factors | Interest Rates
III. Our Approach
IV. FAQs
V. VA Loan Buyer’s Guide
VI. For More Info

I. Eligibility Requirements²

Provided for informational purposes only and subject to change. Strong Home Mortgage eligibility requirements may differ. Contact a loan officer to discuss.

  • Veteran, active-duty servicemember, reservist, or surviving spouse
  • Apply for a Certificate of Eligibility (COE)
  • Prove qualifications based on service history and duty status
  • Meet lender’s credit and income requirements

II. Key Factors | Interest Rates

VA loan interest rates are set by the lender. Some factors that may affect your interest rate include:

  • Loan Purpose (cash-out, purchase, etc)
  • Loan Duration (e.g. 30 year vs 15 year)
  • Credit Score
  • Previous Loan Repayment History
  • Current Market Conditions

Concerned about qualifying with your credit score? Let’s schedule a call.***

III. Our Approach

Strong Home Mortgage is a VA-approved, veteran-led lender who takes great pride in serving the military community. VA loan interest rates, like other mortgage aspects, have many moving parts. Each borrower is unique. Your loan officer becomes single point-of-contact for fewer handoffs, more availability, better dialogue, greater value, and faster closing. We often close in less than 30 days, beating the gold standard for well-qualified customers. We answer questions, promote understanding, clear hurdles, and hustle to deliver your VA benefits sooner.

IV. FAQs

Below are answers to commonly-asked questions, including topics on VA loan interest rates.

What are the first steps ahead?

First, you apply. Next, we order a certificate of eligibility. This lets us know if you have entitlement already used and determines the funding fee for the loan based on exemption status and previous benefit use. Lastly, we order a VA case number and an appraisal.

What are the requirements for a VA Certificate of Eligibility (COE)?

A certificate of eligibility (COE) issued by the Department of Veteran Affairs shows your lender that you qualify under the VA home loan program based on meeting the following requirements:

Veterans who served August 2, 1990 to the present, one of the following criteria must be met:

  • 24 continuous months of service, or
  • The full period (at least 90 days) for which you were called or ordered to active duty, or satisfy your call to active duty the entire period (at least 181 days) for which you were called to active duty.
  • At least 90 days if you were discharged for hardship, a reduction in force, or for convenience of the government, or
  • Less than 90 days if you were discharged due to a service-connected disability.

Active-duty Servicemembers

  • Must complete 90 days of continuous service.

National Guard

  • At least 90 days of non-training active-duty service, or
  • At least 90 days of active-duty service including at least 30 consecutive days (your DD214 must show 32 USC sections 316, 502, 503, 504, or 505 activation), or
  • 6 creditable years in the National Guard and you were discharged honorably or placed on the retired list.

Reservists

  • At least 90 days of non-training active-duty service, or
  • 6 creditable years in the Selected Reserve, and one of these descriptions is true for you
    • You were discharged honorably, or
    • You were placed on the retired list, or
    • You were transferred to the Standby Reserve or an element of the Ready Reserve other than the Selected Reserve after service characterized as honorable, or
    • You continue to serve in the Selected Reserve.
  • Must have and complete six years of duty. Individuals who’ve completed fewer than six years may be eligible if discharged for a service-connected disability.

Surviving spouses of qualified veterans and veterans who are missing in action or prisoners of war (POW) are eligible to receive a COE.

What is the difference between VA loan interest rates and APR?

An interest rate is what you pay each year to borrow money. It doesn’t reflect any fees incurred. The APR, or annual percentage rate, reflects a broader borrowing cost. It includes VA loan interest rates plus any fees tied to obtaining the loan such as origination fees. APR is one measure you can use to compare mortgage offers.

What are discount points?

It’s a path to lowering VA loan interest rates. Discount points enable you to pay interest upfront in exchange for a lower rate over a loan’s lifetime. But points aren’t for everyone. It works best for borrowers who plan to own the home for a longer time. Ask your loan officer if the math works for you.

How does the VA entitlement work?

There are two types of entitlement under the VA loan program:

  • Full entitlement
  • Remaining Entitlement

Full entitlement is offered to those qualifying servicemembers who haven’t used their VA home loan benefit in the past. Full entitlement can be restored when you sell your property, pay your VA-backed loan in full, or repay any claim the VA has paid on either a default, foreclosure, or short sale. As of 2020, eligible veterans, servicemembers, and surviving spouses with full entitlement no longer have limits on loans over $144,000.

Is there a zero down payment option on VA loans?

A zero down payment option is available unless the purchase price exceeds the reasonable value of the property.

Is there an upfront funding fee?

Yes. While a VA loan doesn’t have an upfront mortgage insurance premium similar to an FHA loan, there’s a one-time funding fee paid to the Department of Veterans Affairs that supports the VA loan program. The amount of the one-time funding fee depends on veteran designation, the amount of the down payment, loan type, and whether you’ve received a VA loan in the past. Below are several scenarios for those seeking their first VA loan for a purchase transaction:

  • Down payment less than 5% of purchase price: 2.3% upfront funding fee
  • Down payment between 5% – 10% of purchase price: 1.65% upfront funding fee.
  • Down payment at or above 10% of purchase price: 1.4% upfront funding fee.

For a cash-out refi of an existing VA loan, the funding fee will be 3.6%.

For refinancing an existing VA loan into a new VA loan (with no cash out), there’s a Streamline VA refi with a funding fee of just 0.5% of the loan amount.

Keep in mind that there may be other fees associated with your VA loan. These include appraisal costs, lender fees, taxes, and third-party settlement costs.

Who’s eligible for a funding fee exemption?

You may be eligible for a funding fee exemption under a few scenarios, which may include:

  • You are eligible to receive or you are currently receiving VA disability income related to a disability from your military service.
  • You have received a purple heart.
  • You have a memorandum rating before the closing date that includes a pre-discharge claim.
  • You are the surviving spouse of a Veteran who died in service or as a result of a disability from military service and receiving Dependency and Indemnity Compensation (DIC).
  • Borrowers with a disability rating of at least 10 percent are exempt from the VA funding fee.
  • You may be eligible to receive a refund if you have a pending disability claim that was approved after your closing.

To determine if you qualify, your lender will complete a Form 26-8937 to verify you are receiving disability payments. In some cases, your Certificate of Eligibility will already list your funding fee waiver status.

Can gift funds be used for a down payment?

Yes. VA loans permit gift funds toward down payment and closing costs. However, the gifts must come from a close relationship with the borrower.

Who sets VA loan interest rates?

Mortgage lenders do (mortgage companies and banks).

Are VA loan interest rates the same: purchase vs. refinance?

No. The purpose of the VA loan, your credit score, the loan-to-value ratio, and other factors affect the interest rate. Please review the complete VA loan interest rates table above.

Are VA loan interest rates lower?

VA loan interest rates are often lower than conventional mortgages but will vary depending upon the factors listed under “Key Factors | Interest Rates” above. VA mortgage loans are partially guaranteed by the VA, which reduces the risk to the lender when issuing the loan. The VA loan guaranty promises a portion of the loan will be repaid to the VA approved lender should the borrower go into default or foreclosure.

How volatile are VA loan interest rates?

VA loan interest rates can potentially change daily depending on current market conditions.

Is there a minimum credit score required on a VA loan?

Lenders may set their own minimum credit score requirements as the VA has not established a minimum credit score. However, lenders generally require a minimum credit score of 580. Strong Home Mortgage provides VA loans to eligible consumers with a credit score of 580 or higher.

Can you obtain a VA loan with a previous bankruptcy?

Yes. However, you must wait two years after a dismissal date for chapter 7 bankruptcy and one year after filing a Chapter 13 bankruptcy.

Are there really no loan limits with a VA loan?

Since January 2020, all eligible borrowers have been able to use the maximum loan amount they qualify for without putting any money down. Prior to 2020, VA entitlement essentially capped VA loans at the same dollar amount as conforming loan limits.

Are there any property or usage restrictions?

You must occupy the home for at least one year within the first 60 days after closing. While the program is designed to promote homeownership, it also prevents veterans from purchasing homes for vacation or investment rentals using a VA loan.

What's rate locking?

“Locking” your rate means your interest rate won’t change between the offer and closing, as long as you close within the specified time frame and there are no changes to your application. You may lock your rate when you’re comfortable with the offered interest rate and don’t want it to rise any further. Locks generally expire in 30 to 60 days. To lock VA loan interest rates, please contact us. Locks vary based on the type of loan, market conditions, and more.

V. VA Loan Buyer’s Guide

For more information from the US Department of Veteran Affairs: https://www.benefits.va.gov/HOMELOANS/documents/docs/VA_Buyers_Guide.pdf

VI. For More Info

For detailed requirements, including aspects of VA loan interest rates, please read the FAQs above or visit: https://www.va.gov/housing-assistance/home-loans/eligibility

Ready to explore your VA loan options?

By using this website, you agree to these Terms of Use.  All content provided is for informational purposes only and subject to change.  This website does not offer goods or services to residents located in New York, Georgia, Nevada, or Missouri.

¹In some instances, a down payment may be required. Consult with a loan officer to learn more.
²Additional requirements apply. Eligibility subject to final underwriting approval. This is not a commitment to lend.

6,000+ RATINGS

Our customers speak for us. How can we help you today?

Trustpilot 4.8☆ (4500+)

Zillow 5.0☆ (730+)

Credit Karma 4.7☆ (60+)

Lending Tree 4.9☆ (760+)

Google 4.5☆ (290+)

BBB 4.6☆ (65+)