VA Mortgage Calculator

A VA-guaranteed loan has no down payment requirement and no monthly mortgage insurance, so the payment arithmetic is simpler than an FHA or conventional loan with less than 20 percent down. There is no PMI line and no annual premium. What replaces them is a single one-time charge: the VA funding fee, which this calculator adds to your principal before it amortizes anything. The sequence is short. The fee is your base loan amount times the fee percentage divided by 100, rounded to the cent. That fee is added to the base loan to give the financed principal, and the level monthly payment is then computed on that larger figure using the standard annuity relation M = P·i(1+i)^n / ((1+i)^n − 1), where i is the annual rate over 1,200 and n is the term in months. The calculator also reports the payment you would have had without the fee, so the fee’s monthly cost is visible rather than buried. Month one is split into interest (financed principal times i) and principal (payment minus that interest), and the payoff date is your closing date advanced by the term. The fee percentage is an input because the VA’s schedule is tiered, and picking the right tier is most of the accuracy. For a purchase or construction loan with less than 5 percent down, first use of your entitlement carries 2.15 percent and subsequent use carries 3.3 percent. Put 5 to 9.99 percent down and it falls to 1.5 percent; put 10 percent or more down and it falls to 1.25 percent. Those two down payment tiers are the same whether it is your first VA loan or your fifth — repeat use only penalises the zero-to-under-5-percent band. An Interest Rate Reduction Refinance Loan is a flat 0.5 percent regardless of prior use, while a cash-out refinance follows the same 2.15 versus 3.3 percent split as a purchase. Borrowers receiving VA compensation for a service-connected disability, Purple Heart recipients on active duty, and eligible surviving spouses pay nothing — enter 0. Here is what surprises repeat borrowers. The jump from 2.15 to 3.3 percent for subsequent use is worth more than it looks, and putting down 5 percent can cost less than putting down nothing. On a $320,000 purchase, moving from the 3.3 percent tier to the 1.5 percent tier saves $5,760 in fee — money you would otherwise finance and pay interest on for thirty years. Because the fee is rolled into the balance rather than paid in cash, its real price is not the percentage but the percentage plus three decades of interest on it. At 2.15 percent on $320,000 the fee is $6,880, adding roughly $43 to the monthly principal and interest and considerably more than $6,880 over the full term. A borrower who could reach 5 percent down should price both scenarios before assuming zero down is the cheaper path. What this model excludes: property taxes, homeowners insurance, HOA dues and the VA’s residual income and debt-to-income underwriting. It also assumes the fee is financed, which is the common choice but not the only one — pay it in cash and the correct base loan is what you entered, with the fee set to 0 here. Eligibility still requires a Certificate of Eligibility from the VA. To see how the absence of mortgage insurance actually compares in dollars, price the same house through an FHA loan calculator, where the upfront premium is 1.75 percent and an annual premium continues monthly, or against a conventional loan with a mortgage calculator. If you already hold a VA loan, the 0.5 percent IRRRL fee makes the break-even on a rate reduction unusually short — a refinance calculator will show how short.