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VA Mortgage Rates: Compare Today’s Rates

Andrew Dehan6-minute read

August 30, 2022

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VA loans help military service members, veterans and their families buy homes, often with more favorable terms than conventional mortgages, including no down payment and better interest rates.

Are you considering a VA loan for your next home purchase? Keep reading to see the current VA mortgage rates, along with some additional information on how to qualify for this type of government-backed loan.

See what you’re eligible for.

Rocket Mortgage® uses information about your income, assets and credit to show you which mortgage options make sense for you.

What Is A VA Loan?

A VA loan is a type of non-conforming mortgage that’s guaranteed by the Department of Veterans Affairs and designed to help those with military service histories buy homes at better rates than conventional mortgages. The loans are issued by private lenders like local banks, credit unions and Rocket Mortgage®.

Unlike conventional mortgages, not everyone is eligible to apply for a VA loan. Only qualified veterans, active-duty service members, current and former National Guard and Reserve members and their surviving spouses are eligible for a VA loan.

Proving Eligibility

If you’re interested in taking out a VA loan, you’ll first need to apply for a Certificate of Eligibility (COE) through the U.S. Department of Veteran Affairs. This will show your lender that you qualify based on your service history. You can apply for a COE online or by mail.

The Property Must Meet Minimum Requirements

Once you’ve obtained your COE and qualified for a VA loan, you’ll also need to ensure that the property you’re looking to buy can be purchased with a VA home loan. There are certain restrictions on the types of property you can purchase with a VA loan to ensure that current and former service members are living in homes that are safe and sanitary.

Some of the requirements for VA loans include:

  • All mechanical systems must be safe and in good condition.
  • The property must have proper and functioning heating.
  • The roof should be in good repair.
  • Basements and crawlspaces must be dry.
  • There are no active termites infestations on the property.
  • Any lead-based paint must be removed, or the original surface covered and painted if the paint cannot be removed.
  • The home should be free of mold, mildew, rot and any other severe structural defects.

Additionally, the home you purchase with a VA mortgage must be purchased as your primary residence. VA loans aren’t available for vacation homes or rental properties.

Get approved for a VA loan.

If you’re eligible, apply online today.

Who Sets VA Loan Interest Rates?

While the Department of Veterans Affairs regulates and guarantees VA loans, it doesn’t set VA mortgage rates. Instead, each VA loan lender sets its own rates.

Because each lender sets its own rates, they’ll view your application in different ways. One may offer you a low interest rate while another may offer you a significantly higher rate. The best thing you can do is to seek preapproval from a lender. This will give you an idea of what interest rate you might be eligible for, and can make it easier to compare different VA mortgage interest rates from different lenders.

Current VA Mortgage Refinance Rates

Today's Refinance Rates

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How Are VA Home Loan Rates Determined?

Mortgage rates can fluctuate often, and the rate that one borrower is eligible for may not be available to someone else.

There are several external factors that affect mortgage rates, including the current state of the economy and actions taken by the Federal Reserve. During certain times – including throughout the pandemic – the Federal Reserve may cut interest rates to stimulate economic growth. When this happens, mortgage rates often go down.

There are also internal factors that affect a borrower’s interest rate. One of the most important factors is a borrower’s credit score. Generally, borrowers with credit scores above 740 are eligible for the best rates. Other personal factors that affect your mortgage rate include your debt-to-income ratio (DTI) and the size of your down payment.

While VA loans don’t require a down payment, borrowers may qualify for a lower rate if they choose to put down money upfront. Additionally, while VA loans usually require a DTI of 41% or less, borrowers with lower DTIs may be eligible for the best VA home loan rates.

Finally, the loan term you choose will impact your VA loan. In general, 15-year loans tend to offer lower interest rates than 30-year loans.

VA Home Loan Vs. Conventional 30-Year Fixed Mortgage Rates

A conventional mortgage – the most common type of home loan – is one that isn’t backed by a government agency and is open to everyone regardless of their military service history.. Like VA loans, conventional mortgage requirements are set by the lender and can vary based on your credit score, down payment amount and debt-to-income ratio. However, most qualified current and former military service members are able to get a better interest rate on a VA loan than a 30-year fixed-rate mortgage.

When you compare a VA loan to a conventional loan, you’ll see that VA home loan rates tend to be between 0.25% and 0.42% lower than conventional mortgages. The lower your interest rate is, the more money you’ll save over the life of the loan.

Pros And Cons Of VA Home Loans

VA home loans come with serious advantages to eligible borrowers, but they’re not without their downsides. Here’s what you need to know so you can choose the right type of home loan for your needs:

Pros

  • Interest rates may be lower than what you’d receive with a conventional mortgage.
  • Underwriting and credit requirements are easier to meet.
  • There’s no down payment required.
  • If you forgo a down payment, you aren’t required to take out primary mortgage insurance.
  • Current homeowners who are eligible may be able to refinance their conventional mortgage into a VA loan and earn a lower interest rate.
  • VA loans allow for a higher DTI than conventional mortgages.

Cons

  • There are strict eligibility requirements.
  • VA home loans cannot be used to purchase second homes or investment properties.
  • Borrowers still must pay closing costs on the loan based on the loan amount and their down payment.
  • Borrowers must pay the VA funding fee on top of other closing costs.
  • Not all lenders offer VA loans, meaning borrowers may have a hard time finding a mortgage.

FAQs About VA Mortgage Rates

What refinance options do VA loans have?

As with other loans, VA loan borrowers can refinance their mortgages. The two options available are the VA Streamline refinance (VA IRRRL) and VA cash-out refinance.

A VA Streamline refinance is a simple refinance loan that allows VA loan borrowers to replace their home loans with a new one, often with a lower interest rate or more favorable terms. These loans are called “Streamline refinance” loans because they’re faster and require less paperwork than a traditional refinance loan.

A VA cash-out refinance is a loan that allows borrowers to replace their current VA loan with a VA loan for a larger amount and take the difference in cash.

If you have a conventional loan and are eligible for a VA loan, you may be able to refinance to a VA loan. The process for obtaining this type of refinance loan is like the process of applying for any other VA loan.

Want to refinance a VA loan?

Apply online with Rocket Mortgage®.

What are VA loan fees?

When you borrow a VA loan, you’ll have to pay a VA funding fee, which is a one-time fee paid to the Department of Veterans Affairs. This fee helps to keep these loans affordable since they don’t require a down payment of private mortgage insurance.

The amount you’ll pay depends on the type of loan you get and the total amount of your loan. In general, funding fees range from 0.5% to 3.6% for refinance loans and 1.25% to 3.6% for purchase loans. You can pay your funding fee in one of two ways: by including it in your loan or in full at your closing.

Some borrowers can have their VA funding fee waived, including those with service-connected disabilities and those who have received a Purple Heart.

How can I get the best VA loan interest rates?

While VA loans often come with favorable interest rates, the best rates are ultimately available to borrowers with good credit scores. One of the best ways to increase your chances of a low rate is to build up your credit before applying.

It’s also important to shop around for your rate. The rate you’re eligible for may vary from one lender to the next, and getting quotes from multiple lenders can help to ensure you get the best VA mortgage interest rate.

Who is eligible for a VA loan?

VA loan eligibility is based on your length of service, your duty status and the character of your service. Current service members generally must have 90 continuous days of service to be eligible for a Certificate of Eligibility (COE). Former military members must have served for at least 24 continuous months or a certain number of days of active duty.

The Bottom Line

VA loans offer a simple and affordable solution to help military service members, veterans and their spouses buy homes. They come with plenty of perks, including no down payment and lower mortgage rates than conventional mortgages. If you’re eligible for a VA loan, get preapproved today to see your rate.

Eligible for low VA loan rates?

Apply today to buy a home or refinance with Rocket Mortgage®.

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Andrew Dehan

Andrew Dehan is a professional writer who writes about real estate and homeownership. He is also a published poet, musician and nature-lover. He lives in metro Detroit with his wife, daughter and dogs.