How VA mortgage payments are estimated
Principal and interest
A VA purchase payment starts with the base loan, which is the home price minus the down payment. VA loans can be written with no down payment at all, so the base loan is often the full price. The funding fee, if one applies, is calculated on that base loan and can be added to the debt or paid in cash. This page uses a hypothetical 6% rate, not a quote. On a 500,000 home with nothing down, a first-use funding fee of 10,750 financed makes the debt 510,750, and principal and interest are 3,062.20 a month over 30 years.
Housing costs
Add property tax at 1.2% of the price (500.00 a month) and 2,500 a year of homeowners insurance (208.33 a month) and the first-month payment is 3,770.54. Unlike an FHA or a low-down-payment conventional loan, a VA purchase payment has no monthly mortgage insurance line, so none is added here. Enter your own tax and insurance quotes, and add association dues and other costs if they apply.
Two cautions about the inputs. First, many VA purchases allow no down payment, but whether a lender will lend with nothing down depends on your entitlement, the appraised value and the lender's own requirements, so a zero entry shows a possibility rather than a promise. Second, the rate on this page is only an example; replace it with a quote you have received before reading anything into the payment.
VA funding fee assumptions
For a purchase loan, the funding fee is a percentage of the base loan that depends on the down payment and on whether you have used the benefit before. The rates below are those on the Department of Veterans Affairs funding fee and closing costs page, which VA last updated on 5 October 2026 and which was checked on 25 October 2026. Check that page for any change, since it governs.
| Down payment | First use | Subsequent use |
|---|---|---|
| Less than 5% | 2.15% | 3.30% |
| 5% to under 10% | 1.50% | 1.50% |
| 10% or more | 1.25% | 1.25% |
| Exemption assumed | 0% | 0% |
On a 500,000 home the tiers work out as follows. The tier is decided on the exact down payment percentage, so 4.99% stays in the first band and 5% moves to the next.
| Case | Base loan | Fee rate | Fee | Debt if financed |
|---|---|---|---|---|
| 0% down, first use | 500,000 | 2.15% | 10,750 | 510,750 |
| 0% down, subsequent use | 500,000 | 3.3% | 16,500 | 516,500 |
| 5% down | 475,000 | 1.5% | 7,125 | 482,125 |
| 10% down | 450,000 | 1.25% | 5,625 | 455,625 |
| Exemption assumed | 500,000 | 0% | 0 | 500,000 |
A few practical points follow from the tiers. The percentage is fixed for each band, so crossing a threshold changes the rate on the whole base loan, not only the last dollars. Moving from 0% to 5% down cuts the fee from 10,750 to 7,125, a drop of 3,625, even though the base loan falls by only 25,000. Check the exact percentage you plan to put down.
Financing the fee versus paying upfront
The fee is the same amount either way. What changes is the debt, the cash at closing and the interest. Take the 500,000 home with 5% down: the base loan is 475,000, the fee is 7,125, and the choice looks like this.
| Measure | Financed | Paid upfront |
|---|---|---|
| Debt | 482,125.00 | 475,000.00 |
| Cash due at closing | 25,000.00 | 32,125.00 |
| Principal and interest | 2,890.58 | 2,847.86 |
| Total interest | 558,484.87 | 550,231.40 |
Financing keeps 7,125 in your pocket at closing and raises the payment by 42.72 a month, with 8,253 more interest over 30 years. Paying upfront does the opposite. Neither is right for everyone; the page shows both so the trade-off is visible, and it makes no recommendation.
The right choice depends on what matters to you at closing. Financing helps if cash is tight or you want to keep a reserve for moving costs and repairs, and it lets someone with no down payment close without bringing the fee in cash. The price is a larger loan: the extra 7,125 of debt accrues interest for as long as it is outstanding, which is why the interest line is higher in the financed column. Paying upfront suits a borrower with spare cash and a long holding period. If you expect to sell or refinance within a few years, the extra interest on a financed fee has less time to build, which narrows the gap between the two columns.
Exemption assumptions and official verification
Some borrowers are exempt from the funding fee, and the rules for who qualifies belong to VA. This page does not ask about service, disability or any health information, and it cannot tell whether you are exempt. It simply lets you assume an exemption and sets the fee to zero. Use the official guidance on the VA page linked above, and confirm your status, any earlier use of the benefit and special cases such as manufactured homes with VA or your lender before relying on a number.
An exemption is a status, not a preference, and it changes the numbers a lot. Compare the exempt row in the table above with the first-use row: the fee drops from 10,750 to 0, and the financed debt falls from 510,750 to 500,000. Treat the exemption setting as a question to settle with VA or your lender before you rely on the result, not as a way to make a payment look smaller. If you are unsure, run both and keep the higher figure as your planning number.
Taxes, insurance and closing cash
Cash due at closing is the down payment, plus the funding fee if you pay it in cash, plus any other closing cash you enter. Other purchase costs, such as lender fees, appraisal, title and prepaid items, vary and are paid separately in this model; they are never financed here. The monthly ownership costs you enter grow on their own yearly percentages, stepping up every 12 payments, while principal and interest stay fixed.
Cash due at closing is where many first purchases come under strain, so list the pieces separately. The down payment is the largest. The funding fee is next if you pay it in cash, for example 7,125 on the 5% down example. Then come lender fees, the appraisal, title and settlement charges, prepaid interest, and the first deposits into an escrow account for tax and insurance. Seller credits and lender credits can reduce what you pay, but they depend on the contract and the lender, so they are not assumed here. Property tax can also be reassessed after a sale, so a figure based on the seller's bill may understate yours.
Extra payments and the amortization schedule
Add dated extra payments and the schedule applies them to principal, capping the final payment at what is owed. With 200 extra each month on the no-down-payment example, the loan is repaid 53 payments sooner and saves 103,579 of interest. The monthly, yearly and CSV views separate scheduled principal and interest, extras and ownership costs. The biweekly comparison covers principal and interest only, under a 26-period convention, and is not equivalent to paying twice a month.
Extra payments work as on any fixed-rate loan, but check two things first. Confirm with your servicer how it applies additional money, since it may need written instructions to credit principal rather than hold it for the next due date. And paying early does not reduce the funding fee: the fee was set at closing, and if it was financed, prepaying simply reduces the balance that includes it. Servicers also differ in whether they accept biweekly payments, and a service fee can erase the benefit, so treat the biweekly row as an illustration.
Budget limits and related planning tools
A payment you can calculate is not the same as a payment you can afford. To test the price against income and other debts, check a housing budget and review your debt-to-income ratio. To see a standard loan with private mortgage insurance, compare standard mortgage costs, and for a loan with a different insurance structure, compare FHA insurance assumptions. This page covers a purchase only: residual income, entitlement, loan limits, refinancing programs and adjustable rates are outside it. The real estate calculators page lists the other housing tools.
Think of the result as one input to a larger decision. A lender will also look at your income after taxes and recurring obligations, the stability of that income and the property itself, and VA has its own standards for the home. Ask a VA-experienced lender for a written estimate and compare it line by line.
VA mortgage questions
Is the fee based on home price?
It is based on the base loan after the down payment, before the funding fee is financed.
What changes at 5% and 10% down?
For a nonexempt purchase under the selected rules, the fee falls to 1.5% at 5% down and 1.25% at 10% down.
Does financing the fee cost more?
It increases principal and interest over time; paying upfront uses more cash at closing.
Does this model add monthly PMI?
No. There is no monthly mortgage insurance charge in this VA payment model.
Who confirms an exemption?
The calculator accepts your assumption. Confirm with VA or your lender using the official guidance.
Does this cover refinancing or prove affordability?
No. It estimates a purchase payment; other rules and underwriting need separate assessment.
This page does not give tax advice, and a lender's figures decide. Ask for an itemized loan estimate that shows the funding fee and how it is paid.