Compare Current VA Mortgage Rates (2023)

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A mortgage loan backed by the Department of Veterans Affairs, called a VA loan, is a mortgage option for current or former members of the armed services.

VA loans usually have no or low down payment requirements and lower interest rates than traditional mortgage products. They also tend to be more flexible, allowing for a higher debt-to-income (DTI) ratio and lower credit scores, and don’t require private mortgage insurance (PMI).

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What Are Current VA Mortgage Rates?

Today’s rate on a 30-year, fixed VA loan is 5.95% compared to 5.92% the week prior.

The 52-week high rate for a VA fixed mortgage rate was 6.51% and the 52-week low was 5.77%.

VA Rates Insights

Mortgage rates across the board are expected to continue rising through early 2023, and so will VA mortgage loan rates.

The Mortgage Bankers Association noted in November 2022 that, aside from adjustable rate mortgages (ARMs), rates for all other mortgage loan types are “more than three percentage points higher” compared to a year ago.

Mortgage giant Freddie Mac predicts that mortgage rates in general will average 6.4% in 2023. It’s likely VA rates will follow a similar trend.

What Is a VA Loan?

VA home loans are provided by private lenders such as banks, credit unions and mortgage companies. The VA guarantees a portion of the loan, meaning they are on the hook for a percentage of the amount borrowed in the event of a default. This backstop encourages the lender to provide you with more favorable loan terms.

(Video) VA Loan Limits In 2023 and What You Need To Know About VA Loans In 2023 🏠🇺🇸

This loan product comes with low or zero down payment options and no monthly PMI requirement. Most lenders offer VA loans with 10-, 15-, 20-, 25- or 30-year terms, with fixed or adjustable rates.

Types of VA Loans

The VA offers a variety of home loan programs to help buy, build or improve a home as well as refinance your existing mortgage loan.

  • VA-backed purchase loan: The most common type of VA loan used to purchase a home. These loans tend to have better terms as well as lower rates and costs than a conventional 30-year mortgage.
  • Native American Direct Loan (NADL): A home loan program for veterans who are Native Americans as well as their spouse. This loan can be used to buy, build or improve a home on federal trust land.
  • Interest Rate Reduction Refinance Loan (IRRRL): This allows you to refinance into a lower interest rate or switch to a fixed-rate mortgage from an existing VA mortgage loan.
  • Cash-out refinance: This is a type of mortgage refinance that allows you to take cash out of the equity built up in your home or refinance a non-VA loan into a VA-backed mortgage.

How To Qualify for a VA Loan

You must be a veteran, active-duty service member, a member of the National Guard, reserve or the surviving spouse of a veteran to qualify for a VA loan. A Certificate of Eligibility (COE) from the VA is required. You can apply for your COE online or by mail, or your lender can get it for you.

You can check the full list of eligibility requirements here.

How Much Does a VA Loan Cost?

The VA loan includes a funding fee, put in place by Congress to ensure there is enough money in the program to cover its loan commitments and ensure loan terms are always affordable.

Your lender will also charge other closing fees. Many lenders charge a flat 1% loan origination fee, as well as additional fees. It should be part of your checklist while shopping around to know what loan costs may be added to your overall amount.

VA Loan Funding Fee

The funding fee is a percentage of your total loan amount. It varies based on whether this is your first time making use of the benefit, how many times you’ve used this benefit and the size of your down payment. Funding fees typically range between 1.4% to 3.6% for purchase loans.

You can pay the funding fee either by including it in your overall mortgage loan (also known as financing) and pay it off over time, or you can choose to pay the full fee at closing.

If you used a VA loan to buy a manufactured home, you only have to pay the first-time use funding fee.

When to Consider a VA Loan

While there are no prohibitions against using a VA loan more than once, you won’t enjoy the same benefits as a first-time homebuyer, especially if you plan on keeping your previous VA-backed home.

Pros & Cons of a VA Loan

Pros Cons
No down payment requiredNo down payment can mean higher interest payments
No PMIVA funding fee is an added cost
No minimum credit score requirementIf you choose to finance the funding fee, you’ll have higher monthly payments
No maximum loan amountLenders still have their own credit score requirements
You have the flexibility to refinance if interest rates dropYou could end up owing more than the home is worth if you don’t put any money down
VA loan modification can help if you fall behindOwing more than the home is worth could make it harder to sell

Who Sets VA Loan Rates

The Department of Veterans Affairs does not set mortgage rates. Your lender will determine the rate on your VA loan based on market rates, your credit profile and your financial situation. You may qualify for a lower interest rate if you choose to make a down payment.

How to Find the Best VA Loan Rate

There are many companies online that rank lenders offering VA loans, nationally and in your local area, and provide daily interest rates information. Alternatively, you can work with a mortgage broker that specializes in helping veterans and active-duty military.

You should get a loan estimate from multiple lenders and compare the loan offers using the Consumer Financial Protection Bureau’s (CFPB) guide.

VA Purchase Rates vs. VA Refinance Rates

VA loan purchase rates refer to the interest on a loan to buy a home, while a VA refinance rate will be your new interest rate after you refinance your mortgage.

(Video) VA Wednesday: VA Mortgage Rate Update - Mortgage Lenders Are Still RIPPING People Off 😡

VA Loan vs. 30-year Fixed Mortgage

A VA loan is only available to veterans, active-duty military, reserves or National Guard. A 30-year fixed mortgage, commonly referred to as a conventional mortgage, is available to everyone. It comes with a different interest rate, requires a down payment and might also require PMI depending on how much you put down.

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Frequently Asked Questions (FAQs)

Are VA rates lower than conventional?

While it is a commonly-held belief that VA loans have lower interest rates than conventional loans, that’s not necessarily true. Financial institutions that cater to veterans and active-duty personnel may offer lower interest rates compared to conventional loans. So it’s important who you chose as a lender and to shop around at the outset.

How many times can I use a VA loan?

You can use your VA loan benefits more than once during your lifetime.

Can I buy land with a VA loan?

You cannot use a VA loan to purchase land by itself, even if you intend to build a home later. You must be building a house at the same time in order to be eligible.

(Video) VA Loan Limits 2023: What You Need To Know and Clearing The Confusion For First Time Home Buyers

Can I use a VA loan to build a house?

Yes, you can use it to build a home.

Do VA loans require mortgage insurance?

You do not need private mortgage insurance or have to pay mortgage insurance premiums.

Is there a penalty for paying off a VA loan early?

There is no penalty fee for paying off the loan early.

How long do you have to live in a house with a VA loan?

A VA loan can only be used to fund the purchase of a home that will be your primary residence. The VA has an occupancy requirement mandating that you move in within 60 days after closing. You cannot use the property as a seasonal vacation home.

FAQs

What are VA mortgage rates at right now? ›

Today's national VA mortgage rate trends

For today, Tuesday, January 24, 2023, the national average 30-year VA mortgage APR is 6.10%, up compared to last week's of 6.05%. The national average 30-year VA refinance APR is 6.21%, up compared to last week's of 6.13%.

What is the lowest VA mortgage rate today? ›

VA mortgage rates today, January 24, 2023, start at 5.625% (5.834% APR) for a 30-year fixed-rate loan. Average rates are based on a daily survey of our lender network. Your own VA loan rate will likely be higher or lower depending on factors like your credit score and down payment.

Are VA interest rates going up or down? ›

Current VA loan rate trends

Mortgage rates increased at the fastest pace in three decades in 2022, as the Federal Reserve repeatedly raised benchmark interest rates. Keep in mind that although VA loans have lower rates than conventional loans, they still rise and fall with overall rate trends.

Are VA loan rates the same at all banks? ›

Who Sets VA Loan Rates. The Department of Veterans Affairs does not set mortgage rates. Your lender will determine the rate on your VA loan based on market rates, your credit profile and your financial situation. You may qualify for a lower interest rate if you choose to make a down payment.

Who is the #1 VA lender? ›

Freedom Mortgage Ranked as the #1 VA Lender.

How to get the best VA mortgage rate? ›

How to Get the Best VA Mortgage Rates
  1. Check your credit for errors and debts that bring down your score.
  2. Compare rates from at least three VA lenders and pay special attention to fees.
  3. Ask about state mortgage programs that offer discounts for veterans.
  4. Make a down payment, even if it isn't required.
May 8, 2018

Do VA mortgages have closing costs? ›

The exact amount that you'll pay in VA loan closing costs will vary based on the home you choose and the details of your loan. However, you should expect closing costs to be 3% – 6% of the total value of the loan.

Can you buy down interest rate on VA loan? ›

It's possible to purchase discount points on a VA loan, which is essentially the same as paying prepaid interest. In exchange for an upfront payment at closing, the lender will reduce the interest rate on your loan. For the most part, the process is similar to buying points on a conventional loan.

Is VA loan always 0 down? ›

No down payment, no mortgage insurance

These are perhaps the biggest advantages to a VA loan. You don't need a down payment. None whatsoever. Most mortgage programs, such as FHA and conventional loans, require at least 3.5 percent to five percent down.

Is VA loan better rate than conventional? ›

Typically, when you compare rates for the average 30-year VA loan and a 30-year conventional loan, VA loans usually have lower interest rates. The percentage difference tends to sit between 0.25% – 0.42%.

Are VA loan rates higher than conventional? ›

VA loans also tend to have lower interest rates and looser credit standards. VA loan borrowers pay a funding fee, however, a one-time charge ranging from 0.5 percent of the loan principal on some VA refinances to 3.6 percent.

Will interest rates go down in 2023? ›

Most housing experts say they're hopeful that interest rates will level off in 2023 to around 5% to 6%, but others say the increases will likely continue into early 2023 until inflation is lower.

Why are VA loans not preferred? ›

Why don't sellers like VA loans? Many sellers — and their real estate agents — don't like VA loans because they believe these mortgages make it harder to close or more expensive for the seller.

Why is VA loan interest rate so high? ›

The VA says the higher fees are needed because the loans don't require down payments or private mortgage insurance, though like other loans, the fees can be rolled into the monthly mortgage payment.

Is USAA a good VA lender? ›

USAA is a good mortgage lender to check out if you're VA loan-eligible. In J.D. Power's satisfaction survey, USAA is top-rated by its mortgage customers year after year. It has special expertise in serving veterans, military members, and their families, and would be a great resource for all your VA loan needs.

How often do VA loans fall through? ›

For all purchases, according to Ellie Mae, 74.3 percent of VA loans closed, compared to 74.1 percent of all mortgages. Conventional (non-government did slightly better than VA, with a 75.2 percent closure rate. In short, VA mortgages will close at a high rate and are less likely than the average loan to fail to close.

How to shop around for VA loans? ›

5 Tips for Finding the Best VA Mortgage Lenders
  1. Know your financial numbers. Your credit score, monthly spending and debt-to-income ratio all affect your rate and chances of approval.
  2. Shop more than one lender. ...
  3. Understand the fees. ...
  4. Look at the APR. ...
  5. Find the right lender for your situation.
Jul 2, 2019

What is a good FICO score for a VA mortgage? ›

VA Loan Minimum Credit Score Requirements

There is no minimum credit score requirement for a VA loan, but most mortgage lenders want to see a FICO credit score of at least 620.

How to get a lower mortgage rate with a VA loan? ›

You can further lower your interest rate and closing expenses by offering a down payment on a VA loan. There are state programs that provide exclusive rate discounts and closing cost assistance to eligible veterans, military members and surviving spouses. VA loans are issued by private lenders.

What are the VA disability rates for 2023? ›

2023 Pay Rates for 30% – 60% Disability Rating
Dependent Status30% Disability Rating50% Disability Rating
Veteran (No Dependents)$508.05$1,041.82
Veteran with Spouse (No Dependents)$568.05$1,141.82
Veteran with Spouse and 1 Child$612.05$1,215.82
Veteran with 1 Child$548.05$1,108.82
11 more rows

Who pays closing costs in VA? ›

The Borrower Can

The seller can pay, an agent can pay, the lender can pay but the borrower also has one more way to pay non-allowable closing costs. Recall that an origination fee is an allowable charge. An origination fee is represented as one percent of the loan amount.

What is the VA funding fee for 2022? ›

You'll pay a VA funding fee of $3,135, or 1.65% of the $190,000 loan amount. The funding fee applies only to the loan amount, not the purchase price of the home.

What happens if a VA loan doesn't appraise? ›

If a home doesn't appraise high enough to qualify for the VA home loan, borrowers can challenge the appraisal by requesting a reconsideration of value (ROV). To request an ROV, you would work with your real estate agent to provide your lender with market data that shows the home is worth more than the appraised value.

What is the VA 1% rule? ›

38 C.F.R. 36.4813 limits the fees that a veteran may pay when obtaining a VA-guaranteed home loan. Veterans may pay a maximum of a one percent origination fee charged by the lender (plus reasonable discount points) as well as reasonable and customary amounts for certain itemized fees.

Does your credit score affect your VA mortgage rate? ›

VA's residual income guidelines ensureVeteran borrowers can afford the loan and determine how much money a Veteran must have left over after all debts and living expenses are considered. There is no minimum credit score requirement. Instead, VA requires a lender to review the entire loan profile.

Do you pay mortgage insurance with a VA loan? ›

The short answer is no. There is no monthly mortgage insurance with VA loans. Unlike regular loans, which require mortgage insurance if you put less than 20% down, VA loans do not add this cost to your monthly mortgage bill.

Why does Dave Ramsey not like VA loans? ›

Dave breaks it down to the fact that VA Loans are more expensive with fees and interest rates that you end up paying more than you should ever have had to pay. Another reason that people gravitate to the loans is because they allow you to get a house with nothing down.

Do VA loans have lower monthly payments? ›

You'll save money each month and over time

Deciding to make a VA loan down payment means you'll have a smaller loan amount. This means you'll have a lower monthly mortgage payment and total interest cost over the life of your loan.

Are VA loans easier to get approved? ›

If you're eligible, VA loans are fairly easy to qualify for, since there's no down payment required, no minimum credit scores, and no maximum limit on how much you can borrow relative to income.

Will VA home loans increase in 2022? ›

The standard VA loan limit in 2023 is $726,200 for most U.S. counties, increasing from $647,200 in 2022.

Are VA rates going up? ›

2023 VA disability pay rates, which are effective December 1, 2022, have a year over year increase of 8.7% based on the latest cost-of-living adjustment (COLA). Confirmed as of October 13, 2022, this rate increase is the highest rate increase we've seen in about 40 years.

Are VA mortgage rates lower than conventional? ›

VA rates are typically around 0.5 percent lower than conventional rates. Lower closing costs – The closing costs associated with a VA loan can often be less than those for other loans, since the VA limits the origination fee a lender can charge to no more than 1 percent of the mortgage.

What is the VA loan limit in 2022? ›

Eligible Veterans, service members, and survivors with full entitlement no longer have limits on loans over $144,000. This means you won't have to pay a down payment, and we guarantee to your lender that if you default on a loan that's over $144,000, we'll pay them up to 25% of the loan amount.

Can you borrow 100% of the home value for a VA loan? ›

No. You may generally borrow up to the reasonable value of the property or the purchase price, whichever is less, plus the funding fee, if required. For certain refinancing loans, the maximum loan is limited to 90 percent of the value of the property, plus the funding fee, if required.

Do veterans get better mortgage rates? ›

Because the federal government backs VA home loans, lenders have the luxury of charging competitively low interest rates. Eligible veterans and service members find that rates are generally lower with a VA home loan than a conventional mortgage. The Department of Veterans Affairs (VA) doesn't set interest rates.

What will VA rates be in 2023? ›

VA disability pay for 2023 increased by 8.7%. The new disability compensation rates took effect on December 1, 2022. See the current VA disability pay charts below.
...
2023 Pay Rates for 10% – 20% Disability Rating.
Disability RatingMonthly Pay
10%$165.92
20%$327.99

How much will VA benefits increase in 2023? ›

Beginning Jan. 1, 2023, Veterans and beneficiaries who receive VA compensation benefits will see an 8.7% increase in their monthly payments—the largest increase in over 30 years. The annual COLA increase is tied to the Social Security rate change and is based on the consumer price index (CPI).

Do sellers prefer VA or Conventional? ›

Do sellers prefer VA loans or conventional loans? One big challenge for veteran home buyers is that sellers tend to favor conventional loans over VA loans.

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