How to Calculate VA Mortgage Payments
Calculating your VA mortgage payments might sound intimidating, but it’s easier than you think—and it can make all the difference in planning your financial future.
Whether you're a veteran buying your first home or refinancing your current one, understanding the key elements that shape your monthly mortgage payments puts you in control. But with so many factors at play—interest rates, closing costs, insurance premiums, and even the VA funding fee—it’s important to know where to start.
In this article, we’ll walk you through every step to ensure you know exactly what goes into your VA mortgage payments and how to calculate them confidently.
Ready to move forward now? Start your preapproval process with us today and take the first step toward owning your dream home—no guesswork required.
What Info Do I Need to Calculate a VA Mortgage Payment?
Calculating a VA mortgage payment accurately requires a few key details that can impact your monthly payment significantly. Here’s what you’ll need to get started:
Mortgage Amount:
This is the total loan amount you’re borrowing to buy the home. For a VA loan, the mortgage amount often includes the home’s purchase price minus any down payment, if applicable. If no down payment is made, the mortgage amount equals the home’s full price.
Interest Rate:
The interest rate determines how much you’ll pay monthly in interest on top of the principal. Your rate can vary based on factors like credit score, loan type, and market conditions. VA loans generally offer competitive rates compared to conventional loans.
VA Funding Fees:
One thing that might catch you off guard is the VA funding fee. This is a one-time fee paid upfront by VA borrowers to help offset the cost of the VA loan program. The funding fee is a small percentage of the total loan amount, ranging from 1.4% to 3.6%, depending on whether it's your first home purchase or subsequent use of a VA loan and the size of your down payment amount.
This fee ensures the VA can continue offering loans to future veterans.
However, veterans with a service-related disability are often exempt from paying this fee, so that’s one less thing to worry about when calculating their mortgage costs.
Property Taxes:
Property taxes are determined by the local tax authority based on your home’s value. While paid annually, they’re usually divided into monthly payments and included in your mortgage payment. Property tax rates can vary significantly by location, so it’s essential to account for them when budgeting.
Homeowners Insurance:
Lenders require homeowners insurance to protect against potential risks, such as fire or theft. The cost varies depending on factors like the home’s age, condition, and location. It’s included in your monthly payment, so make sure to get an accurate insurance quote.
Once you have these details, you can input them into any VA mortgage calculator to see a a comprehensive breakdown of your monthly payment, including principal, interest, taxes, and insurance (PITI).
What Is a VA Loan?
A VA loan is a unique mortgage loan backed by the U.S. Department of Veterans Affairs (VA), created specifically to assist veterans, active-duty service members, and certain surviving spouses in purchasing a home.
What sets a VA loan apart from conventional loans is its flexibility and affordability, offering benefits that make homeownership accessible to those who have served their country.
Traditional loans often come with barriers like high down payment amounts or strict credit requirements. For many veterans, these hurdles are impossible to overcome. VA loans remove many of these obstacles, allowing them to pursue home purchase without a huge upfront investment.
VA Loan Eligibility Criteria
Eligibility for a VA loan hinges on several factors, primarily related to the service history of the borrower.
For example, veterans must have served a minimum of 90 consecutive days during wartime or 181 days during peacetime. National Guard and Reserve members may qualify after six years of service. In some cases, those discharged due to service-related disabilities are also eligible.
But it’s not just about service length. You’ll need a Certificate of Eligibility (COE) to confirm your status as a qualifying veteran.
Getting a COE is relatively straightforward, and it’s your ticket to accessing mortgage options through VA loan benefits. If you're unsure about your eligibility or the process of acquiring a COE, the VA website offers an easy online application to get you started.
How is a VA mortgage loan calculated?
After inputting your details, a VA loan calculator will typically generate a breakdown of your expected monthly mortgage payments. This breakdown typically includes:
- Principal: The portion of your payment that goes toward paying down the loan amount.
- Interest: The cost of borrowing the money.
- Taxes: Property taxes based on your location.
- Insurance: Homeowner’s insurance to protect your property.
Each of these components is important. While the principal and interest payments are relatively straightforward, taxes and insurance can vary significantly based on the location of your home. It’s essential to consider these when budgeting for your new home, as they can sometimes push your monthly mortgage payment higher than expected.
How Much Do I Need for a Down Payment on a VA loan?
One of the key benefits of a VA loan is that it doesn’t require a down payment for most qualifying borrowers.
Unlike conventional loans, where a down payment is often necessary, VA loans allow eligible veterans, active-duty service members, and certain surviving spouses to finance 100% of the home’s purchase price.
However, you can choose to make a down payment if you wish, which could reduce your VA funding fee and overall loan amount.
How to Use Rate’s Mortgage Payment Calculator for VA Loans
Our mortgage payment calculator can be an is an essential tool for anyone considering a VA mortgage.
This affordability calculator provides estimated monthly payments, giving you the opportunity to plan your finances before committing to a mortgage. Think of it as a roadmap for your financial journey to homeownership.
Using a VA Loan Calculator for Planning
Veterans and service members can use our payment calculator as a budgeting tool to determine how much home they can afford, what their monthly mortgage payments will look like, and how different factors—such as down payment amounts, loan type, and mortgage rates—affect their overall financial picture.
Our mortgage payment calculator isn’t just a one-time-use tool. It’s something you can revisit whenever your circumstances change. For example, if interest rates drop or you receive a pay raise, plugging those new numbers into the calculator can give you an updated snapshot of your buying power.
The beauty of this tool is its ability to put control in your hands. By experimenting with different scenarios, you can see what your financial future might look like and make informed decisions.
A common mistake homebuyers make is underestimating the importance of taxes and insurance in their calculations. Rate’s mortgage calculator incorporates these variables, helping you avoid any surprises down the road.
VA Loan Benefits and Features
In addition to having no down payment requirements, VA loans comes with some powerful benefits including:
No Private Mortgage Insurance (PMI)
In most cases, if you put down less than 20% on a conventional loan, you’ll need to pay for private mortgage insurance (PMI). This additional cost is designed to protect the lender in case you default.
But with a VA loan, PMI is eliminated entirely, regardless of how much you put down. This could save you hundreds of dollars per month. Without PMI, your amortization schedule becomes more favorable, meaning more of your monthly payments go directly toward paying down the principal.
Competitive Interest Rates
Because the VA backs the loan, VA lenders, are more willing to offer lower loan rates. In fact, VA loans often come with interest rates that are lower than those of conventional loans, even for borrowers with less-than-perfect credit.
A lower interest rate means that more of your monthly payment goes toward reducing your loan balance, helping you pay off your home faster.
VA Loan Limits
VA loans have specific borrowing limits depending on where you’re buying. For 2024, the baseline VA loan limit is $726,200 for most counties, but it can go up to $1,089,300 in high-cost areas.
These limits dictate how much you can borrow without needing a down payment. If the property’s purchase price exceeds the VA loan limit, you can still qualify by making a down payment to cover the difference.
This flexibility is what makes VA loans a standout choice, even in competitive housing markets. Be sure to check the VA’s current loan limits for your area, as they can vary significantly based on local housing costs.
Types of VA Loans
The VA loan program offers several types of loans to meet the needs of different borrowers, whether you’re seeking a fixed rate loan or adjustable-rate option:
Purchase Loans
Purchase loans are the standard VA loan used to finance the full home purchase price of a home which is a primary residence with no down payment, whether you’re a first-time homebuyer or looking to upgrade to a new property.
Cash-Out Refinance Loans
A VA cash-out refinance loan allows you to access your home’s equity for any purpose, including paying off debt, covering medical expenses, or making home improvements.*
VA Streamline Refinance
The VA Interest Rate Reduction Refinance Loan (IRRRL), also known as the VA streamline refinance, is an excellent option for those looking to lower their interest rate and monthly payment. This loan is designed to be simple and efficient, requiring minimal disclosures. Plus, there’s no need for an appraisal or credit check in most cases, making it an easy way to lower your mortgage costs quickly.
Factors Affecting VA Loan Payments
Several factors influence your monthly VA loan payments, and understanding them can help you plan more effectively.
Credit Score
Even though VA loans are more lenient when it comes to credit score requirements, your credit score still plays a major role in determining your loan rates. A higher credit score typically results in a lower interest rate, which in turn reduces your monthly payment.
Loan Term
A shorter loan term, like 15 years, means you’ll pay more each month, but less overall in interest. On the other hand, a 30-year loan will lower your monthly payments but increase the amount of interest you pay over time. It’s a trade-off that depends on your financial situation and long-term goals.
Property Taxes and Homeowners Insurance
Depending on where you live, property taxes can vary dramatically. In high-tax areas, these costs can significantly raise your monthly payment. Similarly, homeowner’s insurance is essential for protecting your investment, and the cost can vary based on factors like the location and condition of your home.
Debt-to-income Ratio
Lenders use debt-to-income ratio to assess your ability to repay the loan. A lower debt-to-income ratio typically results in better loan terms and a more affordable mortgage.
How Can I Start the Process of Getting a VA Home Loan?
Now that you know how to calculate your VA mortgage payments, the next step is to take action, and you don’t have to do it alone.
Connect with one of our loan officers at Rate for a personalized VA loan consultation or pre-approval. With their guidance, you'll not only feel prepared but empowered, knowing that you're making choices that secure your future.
*Using funds from a Cash-out Refinance to consolidate debt may result in the debt taking longer to pay off as it will be combined with borrower’s mortgage principal amount and will be paid off over the full loan term. VA Cash-out Refinance not available in Texas. Rate, Inc. has no affiliation with the US Department of Veterans Affairs. Contact Rate, Inc. for more information.
Rate, Inc. is a private corporation organized under the laws of the State of Delaware. It has no affiliation with the US Department of Housing and Urban Development, the US Department of Veterans Affairs, the Nevada Department of Veterans Services, the US Department of Agriculture, or any other government agency. No compensation can be received for advising or assisting another person with a matter relating to veterans’ benefits except as authorized under Title 38 of the United States Code.