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Published: Oct 17, 2022 4 min read

With features such as backing from the federal government through the Department of Veterans Affairs, the possibility of no down payment and no private mortgage insurance (PMI) requirement, VA mortgage loans are a great way to obtain financing for your home if you meet the service requirements.

What are current VA mortgage rates?

VA Loan Mortgage Rates

As of Jan 24, 2023 - Jan 30, 2023

ProductInterest Rate
Fixed 15 Year5.59%
Fixed 30 Year7.06%
VA Loan Mortgage Refinance Rates

As of Jan 24, 2023 - Jan 30, 2023

ProductInterest Rate
Fixed 15 Year5.96%
Fixed 30 Year7.45%

What is a VA mortgage?

VA mortgages are a type of home loan available to active duty military members, veterans, past and present members of the National Guard and eligible surviving spouses. VA loans typically offer many benefits to qualifying borrowers, such as lower interest rates than you'll find on a conventional mortgage, no money down and allowance for a higher debt-to-income (DTI) ratio, to name a few.

VA mortgage pros and cons

There are several points to consider with every mortgage product. There is no “one-size-fits-all” product, and a VA loan may or may not be the best option even if you qualify. To help you decide, here are some points in favor of, and some against, going with a VA loan for your financing needs:

Pros
  • VA mortgage loans have lower interest rates than conventional loans.
  • VA mortgage loans require zero down payment for qualified borrowers. Although that means your payment will be higher than if you provided a down payment.
  • The DTI ratio for a VA mortgage loan is higher than for a conventional loan.
  • Even with no down payment, no PMI is required.
Cons
  • VA mortgage loans cannot be used for the purchase of investment properties or a second home.
  • While a down payment isn't required, there is a funding fee. The amount of the fee depends on the size of the down payment that you put down (if you do so at all).

2022 Funding fees

Down Payment First Loan Subsequent Loans
<5% 2.3% 3.6%
5% or more 1.65% 1.65%
10% or more 1.4% 1.4%

VA mortgage loan vs. conventional mortgage loan

A VA mortgage loan has several advantages over its conventional counterparts, but it also has several potential disadvantages. Whether or not a VA mortgage loan is the best option for you really depends on your needs and preferences. Some of the differences between the two types of loans are:

  • You can’t use a VA loan to purchase a second home or investment property, whereas with a conventional loan you can.
  • The VA only offers loans to eligible populations, as described above; conventional loans are available to everyone who meets lenders' financial requirements.
  • All VA loans have a funding fee, but conventional loans do not.
  • Conventional loans require a down payment, whereas VA loans do not.
  • The DTI ratio allowed for a VA loan is higher than for a conventional loan. This means that the bank will allow you to have more debt in relation to your income without impacting your odds of approval.

VA mortgage FAQs

When is a VA mortgage loan worth it?

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If you are part of the eligible population and are looking to purchase your primary residence, a VA loan may be a great option for you. Just keep in mind that as far as the flexibility regarding down payments and DTI ratio are concerned, just because you can obtain a VA loan doesn't mean that you should. Although you can get away with not putting forth any money towards a down payment, remember that a down payment reduces your payment, your funding fee and the amount you are going to owe your lender. Regarding the higher DTI ratio limit, you need to make sure that you can actually afford the monthly mortgage payment that you would be committing to.

How to qualify for a VA mortgage loan

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The VA loan program isn't available to everyone. In order to qualify, you must be an active duty service member, a veteran, a past or present member of the National Guard or the surviving spouse of a service member who died in the line of duty. There are also service requirements that must be met before eligibility can be granted. Veterans and active duty service members must have served at least 90 days during wartime or 181 days during peacetime. National Guard members must have served 90 days of active duty service during wartime or six years of creditable service in the Select Reserves or the National Guard. Once eligible, you must apply for a Certificate of Eligibility, which proves to the VA mortgage lender that you meet the eligibility requirements.

How can I find the best VA mortgage loan rates?

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You will have to compare different lenders to get a personalized rate for you since these rates may vary by lender. You may want to consider taking a look at a comparison of several different lenders to help you determine which one might be right for you.

What makes our data different?

Money’s daily mortgage rates show the average rate offered by over 8,000 lenders across the United States over the last 7 days. Our rates reflect what a typical borrower with a 700 credit score might expect to pay for a home loan right now. These rates were offered to people putting 20% down and include discount points.

Disclaimer: We try to keep our information current and accurate. However, interest rates are subject to market fluctuations and vary based on your qualifications. Calculator results assume a good credit score and factor in regional averages; your actual interest rate may differ. Calculator results are for educational and informational purposes only and are not guaranteed. You should consult a licensed financial professional before making any personal financial decisions.