VA loans offer great opportunities for eligible active-duty service members, veterans and their spouses to secure home mortgages with lower interest than other types of loans offer. However, securing the best VA mortgage rates requires due diligence as you compare different lenders. In this article, we explain how to find the lowest rates on VA loans.
Current mortgage rates
Rates are effective 09/26/2021 and are subject to change without notice. APR shown is provided by a partner of ConsumerAffairs.
The APR shown of 3.307% is available for a 30-year fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.
The APR shown of 3.145% is available for a 20-year fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.
The APR shown of 2.914% is available for a 30-year VA fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.
The APR shown of 2.446% is available for a 10-year fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.
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Questions about VA loan rates
How do I find current VA mortgage rates?
VA loan rates vary by lender. Therefore, it’s important to compare rates from different mortgage lenders before finalizing a loan. You can start by contacting lenders to ask about today’s VA rates, which can give you a general idea of the current market and a starting point for your application process.
What is a good VA mortgage rate?
Typically a VA mortgage rate is lower than other types of loans you might see at banks, credit unions and mortgage companies. At the time of publishing, rates on 30-year VA loans are as low as 2.25% to 2.5%.
VA loans are backed by the federal government, but interest rates are determined by individual lenders.
Are VA mortgage rates lower than conventional rates?
Yes, in most cases, VA loan rates are lower than rates on conventional loans. Mortgage lenders are able to offer lower rates because the federal government guarantees part of the loan against loss.
What is a VA loan?
A VA loan is a home loan backed by the federal government that helps veterans, service members and their surviving families buy, construct, renovate or refinance a home.
VA loans have a number of advantages over other types of loans. For example, VA purchase loans have lower interest rates, no down payment requirement, no mortgage insurance requirement, lower closing costs and no prepayment penalty.
Who qualifies for a VA loan?
If you are an active-duty service member, a veteran or a surviving spouse of a U.S. military veteran, you may be eligible for a VA loan. Once you fulfill the requirements of a VA loan, you get a Certificate of Eligibility, which your lender will require.
The requirements to qualify for a VA loan include the following:
- You are/were serving as an active-duty member of the U.S. military for 90 days during wartime.
- You are/were serving actively with the military for 181 continuous days during peacetime.
- You are/were serving in the National Guard or Selected Reserve for six years.
- You are a surviving spouse of a U.S. veteran who was killed in the line of duty or was missing in action or a prisoner of war for at least 90 days.
What are the pros and cons of VA loans?
A VA mortgage offers veterans and service members a number of benefits with few, if any, drawbacks.
- Can be used to buy a home, buy a condo, purchase and improve a home, build a new home or make your home more energy-efficient
- Lower rates than on conventional loans
- No mortgage insurance required
- No down payment required
- Fewer closing costs
- Refinance options available, including interest rate reduction refinance loan (IRRRL), which can help you lower your rate or make your monthly payment more stable
- Still must meet lender criteria for credit and income
- Must live in the home you’re purchasing with the loan
- One-time VA funding fee for most borrowers
How much does a VA loan cost?
A VA loan in most cases includes a funding fee, which is based on the type of loan, your down payment amount, the total loan amount and whether or not it’s your first time getting a VA loan. For first-time VA borrowers of VA purchase and construction loans, the VA funding fee ranges from 1.4% to 2.3% of the loan amount. The buyer can negotiate with the seller on who pays the VA funding fee and other closing costs, such as the loan origination fee and the appraisal fee. The seller is responsible for certain closing costs, such as the commission.
Who sets VA loan rates?
Lenders set VA loan rates. VA loan rates are generally lower than on other types of home loans. You can get a VA loan from various lenders, including private banks, credit unions and mortgage companies.
How are VA loan rates determined?
VA mortgage rates depend on various factors. These include the lender, your down payment and your credit score — factors that you have some control over. By improving your financial profile — such as lowering your debt-to-income ratio or raising your credit score — you may be able to find lower interest rates. You should also apply with various lenders to find the one with the best offer. Current market conditions also play a role in prevailing VA loan rates — something that’s outside your control.
Are VA purchase rates and refinance rates different?
Yes, VA purchase rates can be different from refinance rates. The rates you secure will depend on factors including:
- The type of loan (purchase, interest rate reduction refinance loan, cash-out refinance loan)
- Your credit history
- The loan term
- Current market conditions
- The lender
Each lender determines its interest rates for VA purchase loans and the different types of refinancing loans.
How do I get the best VA mortgage rate?
Here are some tips to help you get the best VA home loan deal:
- Take steps to minimize your debt-to-income ratio.
- Try to increase your credit score. Start by reviewing your credit report to make sure it's accurate.
- Contact and apply for pre-qualification/preapproval with several VA lenders, including banks, credit unions and mortgage companies.
For more information about which lenders to consider, compare our top-rated VA lenders. We explain how to choose a lender and how to apply.
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. To learn more about the content on our site, visit our FAQ page.
- U.S Department of Veterans Affairs, “VA-backed Veterans home loans.” Accessed July 13, 2021.
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