VA Loan Calculator: The $0 Down Military Benefit Most Veterans Underuse

The VA home loan benefit is one of the most valuable financial benefits available to US military veterans, active duty service members, and surviving spouses. No down payment. No private mortgage insurance. Competitive rates. Most eligible veterans never use it.

Who Qualifies for a VA Loan

• Veterans who served 90 consecutive days during wartime or 181 days during peacetime
• Active duty service members with 90 days of continuous service
• National Guard and Reserve members with 6 years of service
• Surviving spouses of service members who died in the line of duty

You'll need a Certificate of Eligibility (COE) from the VA, which your lender can usually obtain directly.

VA Loan Key Benefits

• $0 down payment required
• No private mortgage insurance (PMI)
• Competitive interest rates (often 0.25-0.50% below conventional)
• Limits on closing costs (seller can pay all closing costs)
• No prepayment penalties
• Assumable by a qualified buyer (valuable if rates rise)

VA Funding Fee

The one significant cost is the VA funding fee. This replaces mortgage insurance and is a one-time charge that keeps the program self-funded. It can be rolled into the loan.

| Down Payment | First Use | Subsequent Use | |-------------|-----------|----------------| | Less than 5% | 2.15% | 3.30% | | 5% to 9.99% | 1.50% | 1.50% | | 10% or more | 1.25% | 1.25% |

Exemption: Veterans receiving VA disability compensation of 10% or more are exempt from the funding fee. This is a significant benefit many disabled veterans don't know about.

Real Numbers: $400,000 Home, VA vs FHA vs Conventional

VA Loan (First Use, $0 Down)

• Home price: $400,000
• Down payment: $0
• VA funding fee (2.15%): $8,600 (rolled into loan)
• Loan amount: $408,600
• Interest rate: 6.25% (VA rates are typically lower)
• Term: 30 years
• PMI: None

Monthly P&I: $2,517 Monthly insurance + taxes (est.): $490 Total monthly payment: $3,007

Total interest paid over 30 years: $497,130 VA funding fee: $8,600 Total 30-year cost: $905,730

FHA Loan (3.5% Down)

• Down payment: $14,000
• Loan amount: $386,000 + upfront MIP $6,755 = $392,755
• Interest rate: 6.50%
• Annual MIP: 0.55% = $180/month

Monthly P&I: $2,483 Monthly MIP: $180 Monthly insurance + taxes: $490 Total monthly payment: $3,153

Total 30-year cost: $897,000 (includes lifetime MIP)

Conventional Loan (10% Down, 720 Credit Score)

• Down payment: $40,000
• Loan amount: $360,000
• Interest rate: 6.65%
• PMI: 0.70% until 80% LTV (~8 years)

Monthly P&I: $2,312 Monthly PMI (first 8 years): $210 Monthly insurance + taxes: $490 Total monthly payment (first 8 years): $3,012

Total 30-year cost: $793,000

Comparison Table

| Factor | VA ($0 down) | FHA (3.5% down) | Conventional (10% down) | |--------|-------------|-----------------|------------------------| | Cash to close | ~$3,000-5,000 | ~$18,000-22,000 | ~$44,000-48,000 | | Monthly payment | $3,007 | $3,153 | $3,012 (drops to $2,802) | | PMI/MIP | None | Life of loan | 8 years | | 30-year total cost | $905,730 | $897,000 | $793,000 |

The conventional loan with 10% down has the lowest total cost, but requires $40,000+ at closing. If you're choosing between VA and FHA at low down payment, VA wins: lower payment, no mortgage insurance, and similar total cost despite the funding fee.

VA Loan Limits

Since 2020, there are no loan limits for veterans with full VA entitlement (no current VA loans). You can purchase a home at any price with $0 down, subject to lender approval.

If you have a current VA loan or have used part of your entitlement, limits may apply. Your COE will show your available entitlement.

Refinancing With VA: The IRRRL

The Interest Rate Reduction Refinance Loan (IRRRL) is a VA streamline refinance that requires minimal documentation and no appraisal in most cases. If rates drop, this is faster and cheaper than a conventional refinance.

The funding fee for an IRRRL is only 0.50% of the loan amount, compared to 2.15% on a purchase.

Run the Numbers

Use the Mortgage Calculator to model your VA loan payment, total interest, and how it compares to FHA and conventional options with your specific purchase price, rate, and term.