How a VA home loan payment works
This VA loan calculator handles the two things that make a VA home loan different from every other mortgage. First, there is no PMI, ever. Conventional borrowers who put down less than 20% pay private mortgage insurance of roughly 0.3% to 1.5% of the loan per year; VA borrowers pay $0 for mortgage insurance even with nothing down. Second, there is a one-time VA funding fee, which nearly everyone finances into the loan rather than paying in cash at closing, so your loan balance is slightly larger than the price minus your down payment.
The 2026 funding fee for purchase loans depends on your down payment and whether you've used the benefit before:
| Down payment | First use | Subsequent use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% to 9.99% | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
Veterans receiving VA disability compensation (and certain surviving spouses and Purple Heart recipients) are exempt: the fee is waived entirely, which is why the calculator has that toggle.
The formula
The base loan (price minus down payment) gets the funding fee percentage added on top, and that total is what actually amortizes. M is the monthly principal & interest payment, r the monthly rate (annual ÷ 12 ÷ 100), and n the number of payments (years × 12). At 0% interest the payment is simply Loan ÷ n.
Worked example
A first-time VA buyer purchases a $400,000 home with $0 down at 6.5% for 30 years. The funding fee is 2.15% of the $400,000 base loan = $8,600, financed in for a total loan of $408,600.
Monthly principal & interest: $2,582.63. Lifetime interest over 30 years: $521,146.78. Monthly PMI: $0. A conventional borrower at this down payment simply couldn't get this deal, and even at 3% to 5% down would typically add $150 to $400 a month in mortgage insurance.
VA loan vs conventional: the same house, side by side
The fair comparison isn't a VA loan against a 20%-down conventional loan; it's against what a buyer with limited cash would actually get. Here's a $350,000 home at 6.5% for 30 years, VA with nothing down versus conventional with 5% down and PMI estimated at 0.75% of the loan per year (typical quotes run about 0.5% to 1% depending on credit):
| VA, 0% down | Conventional, 5% down | |
|---|---|---|
| Cash needed for down payment | $0 | $17,500 |
| Amount financed | $357,525 (incl. $7,525 funding fee) | $332,500 |
| Monthly P&I | $2,259.80 | $2,101.63 |
| Mortgage insurance | $0 | $207.81/mo |
| Total monthly | $2,259.80 | $2,309.44 |
The VA borrower pays $49.64 less per month despite financing a larger balance, and keeps $17,500 in the bank. The honest caveat: conventional PMI cancels once you reach 20% equity (on request at 20%, automatically at 22%), after which the conventional payment runs about $158/mo lower, while the financed funding fee never leaves the VA loan. So with little cash down, VA wins clearly; with 20% down and strong credit, conventional gets competitive because it charges no funding fee at all. Either way, taxes and insurance stack on top of every number above. The mortgage calculator builds the full PITI payment, and the property tax calculator estimates the tax line for your county.
The funding fee in depth: financing it vs paying cash
The table at the top of this page shows the rates; here's what they cost in practice. Almost everyone rolls the fee into the loan, and on the $400,000 example that $8,600 becomes $54.36 a month: about $10,969 of interest over 30 years, for a total cost of roughly $19,569. Financing roughly doubles what the fee ultimately costs you, but it costs nothing at closing, which is usually the whole point of a VA loan. If you have spare cash beyond your emergency fund, paying the fee upfront is a solid guaranteed saving; if paying cash would drain your reserves, finance it without guilt. (The same amortize-it-or-not logic applies to any lump sum; the loan calculator runs it for arbitrary amounts.)
The down payment lever is stronger than most people expect. On a $350,000 home: $0 down means a $7,525 fee (2.15%), but 5% down drops the fee to $4,987.50 (1.5% of the smaller $332,500 base loan), and 10% down cuts it to $3,937.50 (1.25% of $315,000). A modest down payment shrinks both the fee percentage and the balance it's charged on.
And the exemption is bigger than a discount: it's total. If you receive VA disability compensation at any rating (10% counts), are eligible for it but drawing military retirement pay instead, are an active-duty Purple Heart recipient, or are an eligible surviving spouse, the fee is waived entirely. One more quirk worth knowing: if your disability claim is pending when you close and is later granted with an effective date before closing, you can apply to have the fee refunded. That's worth a phone call if it applies to you.
Who qualifies: the COE, service requirements, and credit
To use the benefit you need a Certificate of Eligibility (COE) from the VA, based on your service history. The general minimums: 90 days of consecutive active-duty service during wartime, 181 days during peacetime, or 6 creditable years in the National Guard or Selected Reserve (90 days of non-training active-duty service also qualifies Guard and Reserve members). Surviving spouses qualify too: generally the un-remarried spouse of a veteran who died in service or from a service-connected disability, typically established through Dependency and Indemnity Compensation. Lenders can usually pull your COE electronically in minutes, so don't let a missing piece of paper stop you from getting pre-approved. (Surviving-spouse benefits are also a reminder to look at the other side of the ledger; the life insurance calculator sizes the coverage that protects a mortgage like this one.)
On credit: the VA sets no minimum credit score. Individual lenders add their own floors (most sit around 620, and some will work down to about 580), and they'll also check income and the VA's residual-income test. On property: VA loans cover owner-occupied homes of one to four units, so a duplex with a tenant in the other half is fair game, as long as you move into one unit (generally within 60 days of closing).
Zero-down lending sounds reckless until you see the mechanics: the VA guarantees a chunk of every loan, so the lender's risk on a default is dramatically lower. That guarantee is what the funding fee pays for, replacing PMI as the system's insurance. The lender still qualifies you on credit and income like any mortgage; the VA just removes the down-payment and mortgage-insurance walls.
Using the benefit again: entitlement and second use
Your VA entitlement is reusable, not one-shot. The basic entitlement is $36,000, and most veterans also have bonus (second-tier) entitlement on top, tied to 25% of the conforming loan limit ($832,750 in most counties for 2026). Sell the home and pay off the loan and your full entitlement is restored for the next purchase. You can even hold two VA loans at once (common after military relocation orders) if enough entitlement remains; a quick rule of thumb is that your remaining entitlement times four approximates your zero-down buying power on the second home. The real cost of reuse is the fee tier: with less than 5% down, a subsequent-use purchase pays 3.3% instead of 2.15%. On a $350,000 zero-down loan that's $11,550 versus $7,525, a $4,025 difference. Put 5% down on the second home and both tiers collapse to the same 1.5%, which makes a small down payment unusually valuable the second time around.