🇺🇸 VA Loan Calculator

VA loan guide

VA loans are a powerful veteran benefit

VA loans are guaranteed by the Department of Veterans Affairs and available to eligible veterans, active duty service members, and some surviving spouses. They offer competitive rates, no down payment requirement, and no private mortgage insurance. That combination can save tens of thousands of dollars over the life of the loan compared to conventional or FHA financing.

I built this calculator to show you what a VA loan costs compared to other options. Use the sections below to understand entitlement, funding fees, and when VA loans make the most sense.

Understanding VA entitlement

VA entitlement is the amount the VA will guarantee on your loan. It is not a loan limit in most cases. Veterans with full entitlement can often borrow more than the conforming loan limit without a down payment, as long as the lender approves and the veteran qualifies.

Basic entitlement

Basic entitlement is $36,000 for most veterans. This amount has been in place since the 1970s. On its own, basic entitlement supports a loan up to $144,000 with no down payment, since lenders typically lend up to four times the entitlement amount. Most home prices exceed that threshold, so veterans also use bonus entitlement.

Bonus entitlement

Bonus entitlement increases the total guarantee and allows veterans to buy homes above $144,000 with no down payment. For most counties, the total entitlement is now tied to the conforming loan limit, which changes annually. In 2026, that limit is $806,500 in most areas and higher in expensive counties.

Hypothetical example: if the conforming limit in your county is $806,500 and you have full entitlement, you can typically buy a home up to that amount or higher with no down payment, subject to lender approval and your income qualification. If you want to buy above the county limit, you may need a down payment equal to 25% of the amount over the limit.

Restoring entitlement

Entitlement can be reused after you sell the home and pay off the VA loan, or if you refinance the VA loan into another VA loan. If you have a remaining balance from a previous VA loan, that amount may reduce your available entitlement until you pay it off or sell that property. Check your Certificate of Eligibility (COE) to see your available entitlement before you apply.

VA funding fee explained

The VA funding fee is a one-time charge that helps offset the cost of the VA loan program. It is not a down payment. It is usually rolled into the loan amount, so you do not pay it out of pocket at closing. The fee varies based on loan type, down payment amount, and whether this is your first VA loan or a subsequent use.

Standard funding fee rates

For first-time use with no down payment, the funding fee is typically 2.15% of the loan amount as of recent guidelines. If you put at least 5% down, the fee drops to 1.5%. At 10% or more down, it drops to 1.25%. Subsequent use with no down payment is usually 3.3%. Refinance loans have different fee structures. Confirm current rates with your lender, as Congress adjusts these percentages periodically.

Hypothetical scenario: on a $350,000 loan with no down payment and first-time use, the funding fee is around $7,525. That amount is added to the loan, so your total loan balance becomes $357,525. You do not need that cash at closing.

Funding fee exemptions

Veterans receiving VA disability compensation are exempt from the funding fee. Surviving spouses receiving Dependency and Indemnity Compensation are also exempt. If you qualify for an exemption, you save thousands of dollars. Provide documentation to your lender before closing to ensure the fee is waived.

No PMI is a major advantage

VA loans do not require private mortgage insurance, even with zero down payment. Conventional loans typically require PMI when you put less than 20% down. FHA loans require mortgage insurance premiums for the life of the loan in many cases. VA loans avoid both, which can save $100 to $300 or more per month depending on loan size and credit profile.

Hypothetical comparison: on a $320,000 conventional loan with 5% down, PMI might cost $200 a month. Over five years, that is $12,000. A VA loan skips that cost entirely. Even after accounting for the funding fee, the VA loan often saves money over time. Use the calculator above to model the full comparison with your loan amount and down payment.

Residual income and debt to income requirements

VA loans use both debt to income ratio and residual income to measure affordability. DTI is the ratio of monthly debts to gross monthly income. Residual income is the cash left over after paying debts, taxes, and basic living expenses. The VA sets minimum residual income requirements based on family size, region, and loan amount.

Why residual income matters

Residual income is designed to ensure you can afford the mortgage and still cover daily living costs. A borrower with a low DTI might still fail residual income if their gross income is modest. Conversely, a borrower with a higher DTI might pass residual income if their gross income is strong. This dual test can help or hurt depending on your situation.

Your lender will calculate residual income as part of underwriting. If you are close to the threshold, ask about strategies to improve the number, such as paying down revolving debt or documenting additional income sources.

Certificate of Eligibility (COE)

The COE proves you are eligible for a VA loan. You can request it online through the VA website, through your lender, or by mail using VA Form 26-1880. Most veterans with honorable discharge and sufficient service time qualify. Active duty members typically qualify after 90 days of continuous service during wartime or 181 days during peacetime. National Guard and Reserve members need at least six years of service in most cases.

Get your COE before you start house hunting. It shows sellers and agents you are a serious buyer with financing lined up. It also confirms your available entitlement so you know your borrowing capacity.

When VA loans beat conventional and FHA

VA loans often win on cost when you compare total interest, monthly payment, and upfront fees over time. They are especially strong when you have little or no down payment saved, when your credit is good but not excellent, or when you want to avoid PMI.

VA versus conventional

Conventional loans offer competitive rates when you have 20% down and strong credit. Below 20% down, PMI makes conventional loans more expensive than VA loans in most cases. If you can put 20% down and your rate is better on a conventional loan, run the numbers in both the monthly payment calculator and this VA loan calculator to see which saves more over your expected ownership period.

VA versus FHA

FHA loans allow down payments as low as 3.5% and are easier to qualify for with lower credit scores. They also require mortgage insurance premiums both upfront and monthly for the life of the loan in many cases. VA loans skip ongoing mortgage insurance entirely. If you qualify for both, VA is usually cheaper over time. FHA may still be useful if your credit is too low for VA approval or if you are buying a fixer-upper that needs FHA 203(k) rehab financing.

Property and occupancy requirements

VA loans are for primary residences only. You must intend to occupy the home within a reasonable time after closing, typically 60 days. You cannot use a VA loan to buy an investment property or a second home for vacation use. The property must meet VA minimum property requirements, which focus on safety, sanitation, and structural integrity.

VA appraisers are often more conservative than conventional appraisers. If the property has significant deferred maintenance, peeling paint, or safety hazards, the appraiser may require repairs before closing. Plan for this possibility when you make an offer on a fixer-upper.

Closing costs and seller concessions

VA loans limit the fees veterans can be charged. Lenders cannot charge certain junk fees, and the VA sets caps on others. Sellers are allowed to pay up to 4% of the purchase price toward buyer closing costs, which is more generous than many conventional loans. Negotiate seller concessions when you make an offer to reduce your out of pocket costs.

Even with no down payment and seller concessions, budget for some cash at closing. You will likely need to cover the home inspection, appraisal deposit if not rolled into the loan, prepaid property taxes and insurance, and earnest money. Check with your lender for a full breakdown before you make an offer.

When to use VA loan refinance options

The VA offers streamline refinance options (IRRRL) that simplify rate and term refinancing with minimal documentation and no appraisal in many cases. If you already have a VA loan and rates drop, an IRRRL can lower your payment quickly. Cash-out refinances are also available if you want to tap equity. Both options charge a funding fee, but it is usually lower than the purchase fee.

Compare VA refinance costs to conventional refinance options using the refinance calculator. Sometimes conventional refinancing is cheaper if you have built significant equity and your credit has improved.

Why VA loans are underused

Many veterans do not realize they qualify or underestimate the savings. Some real estate agents and sellers wrongly believe VA loans are harder to close or take longer than conventional loans. Educate your agent and be prepared to show that VA loans are competitive. Work with a lender experienced in VA loans to avoid delays.

If you are a veteran or active duty service member, check your eligibility and run the numbers before you assume conventional or FHA is better. For first-time buyers, see our first-time homebuyer guide for additional planning steps.

This guide is general educational information only. It is not financial, tax, or lending advice. VA loan rules, funding fees, entitlement limits, and program requirements change. Confirm figures with a VA-approved lender and check your COE before you apply.