Compare current VA home loan rates (2025)

How are VA loan rates determined?

Lenders, including private banks, credit unions and mortgage companies, are responsible for setting their own VA loan rates. While these rates are generally lower compared with other types of home loans, it's advisable to shop around and compare offers from various institutions to secure the most favorable terms.

The VA mortgage rate you’ll receive is determined by a range of factors, including:

• Down payment: The amount you put down as a down payment can influence your VA loan rate. While the VA doesn’t require a down payment, offering one may result in a lower interest rate.
• Credit score: Your credit score plays a crucial role in determining the interest rate on your VA loan. A higher credit score generally leads to more favorable rates.
• Financial profile: Factors like your debt-to-income ratio (DTI) and overall financial health also impact VA loan rates. Working toward a stronger financial profile can potentially help you qualify for lower interest rates.

While you have some control over the factors mentioned above, it's important to note that prevailing market conditions also influence VA loan rates. Economic factors, national interest rates and broader financial trends can impact the interest rates lenders offer.

Andrew Lokenauth, a finance specialist with TheFinanceNewsletter.com, noted these key external factors that influence VA mortgage rates:

• Federal Reserve interest rate policy: VA rates closely follow the Fed's actions on short-term rates.
• Overall bond market performance: Mortgage bonds significantly impact mortgage rates.
• Lender competition: Increased competition among lenders offering VA loans exerts downward pressure on rates.
• Refinancing demand: High demand for refinancing can lead to an upward trend in rates.
• Rate locks: The ability to lock in a rate serves as a protective measure for borrowers, shielding them from potential rate hikes.

» MORE: VA loan requirements

VA loan rates vs. other mortgage rates

VA loan rates are generally lower than rates on other types of mortgages, such as FHA loans and conventional loans. As of Dec. 13, 2023, the average fixed rates on 30-year mortgages, according to the St. Louis Fed, were:

• VA loans: 6.334%
• USDA loans: 6.599%
• FHA loans: 6.713%
• Conventional loans: 6.898%

While a few decimal points of a percentage may not seem like much, it can add up to thousands of dollars over the life of your loan. For example, on a 30-year $400,000 mortgage, the total amount you’d pay in interest, based on the above-noted rates, would be:

• VA loan: $494,514.72
• USDA loan: $519,573.59
• FHA loan: $530,442.37
• Conventional loan: $548,191.56

The reason for the lower VA loan rates is the government guarantee. The federal government backs a portion of VA loans, reducing the risk for lenders. As a result, lenders can offer more favorable terms to veterans and active-duty military personnel.

» MORE: How to save money for a house

How to get the best VA mortgage rate

While you can’t control external factors such as the Fed interest rate, you can improve your chances of getting a good rate on your VA mortgage by optimizing your financial profile and carefully selecting a lender.

Here are some tips to help you get the best VA home loan deal:

Improve your credit score

Your credit score significantly impacts your VA mortgage interest rate. Lenders perceive borrowers with higher credit scores as less risky. To improve your credit score, consider the following:

• Obtain copies of your credit report to review your score and identify any errors.
• Pay down outstanding debts, particularly those with high interest rates.
• Establish a history of timely payments across all your credit accounts to demonstrate creditworthiness.

If needed, consider consulting a credit counselor to develop a personalized credit improvement plan.

Minimize your debt-to-income ratio

Lenders assess your DTI, which represents the percentage of your gross monthly income that goes toward debt payments, to determine your ability to manage a mortgage. A lower DTI indicates financial stability and increases your appeal as a borrower.

To reduce your DTI:

• Focus on paying down debts with high interest rates, such as credit cards, to lower your monthly obligations.
• Refrain from taking on new debt, such as additional credit cards or loans, before applying for your VA home loan.
• If possible, explore opportunities to boost your income, such as seeking a raise, taking on additional work or generating additional revenue streams.

Shop around and compare VA lenders

Different VA-approved lenders offer varying interest rates, fees and terms. By comparing options, you can identify the lender that best suits your financial needs and preferences.

Request quotes from several VA-approved lenders to compare interest rates, closing costs and any additional fees. You can also inquire about lenders' willingness to negotiate terms or waive fees to secure your business.

But keep in mind that while rates and fees are important, so are other factors like customer service. Research the reputation and customer reviews of each lender to assess their overall service quality and customer satisfaction.

Bottom line

VA loans provide veterans, active military members and military families an opportunity to achieve homeownership with notably low interest rates, resulting in a more cost-effective borrowing experience compared to other mortgage types.

To find the most favorable terms, explore quotes from various lenders. This ensures you select the option that aligns best with your specific needs and financial circumstances.