Calculator Use
The va mortgage calculator is designed specifically for US Veterans, active-duty service members, and eligible surviving spouses to estimate their monthly housing costs. Unlike conventional loans, VA loans often require $0 down payment and do not require private mortgage insurance (PMI). This calculator accounts for the unique VA Funding Fee, which is a mandatory administrative cost that helps sustain the program for future generations of heroes.
By adjusting variables like home price, interest rates, and the option to roll the funding fee into the loan, you can see how different scenarios impact your monthly budget.
- Home Price
- The total purchase price of the home you wish to buy.
- Down Payment
- VA loans allow for 0% down, but any amount you put down will reduce your loan balance and potentially lower your Funding Fee percentage.
- VA Funding Fee
- A one-time fee paid to the VA. The percentage depends on whether it is your first time using the benefit and your down payment amount.
- Interest Rate
- The annual percentage rate charged by your lender.
How It Works
A VA mortgage calculation differs from a standard mortgage because of the Funding Fee and the absence of PMI. The core of the monthly payment is calculated using the standard amortization formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
- M: Total monthly principal and interest.
- P: Principal loan amount (includes the VA Funding Fee if rolled in).
- i: Monthly interest rate (annual rate / 12).
- n: Number of months (years * 12).
Calculation Example
Example: A first-time user purchases a home for $300,000 with 0% down payment, a 6% interest rate, and a 30-year term. They choose to roll the 2.15% funding fee into the loan.
Step-by-step solution:
- Base Loan: $300,000
- Funding Fee (2.15%): $300,000 * 0.0215 = $6,450
- Total Loan Amount (P): $300,000 + $6,450 = $306,450
- Monthly Interest (i): 0.06 / 12 = 0.005
- Number of Months (n): 30 * 12 = 360
- Monthly P&I: $306,450 * [0.005(1.005)^360] / [(1.005)^360 – 1] = $1,837.33
- Total Payment: $1,837.33 (plus taxes and insurance)
Common Questions
What is the VA Funding Fee?
The VA Funding Fee is a government fee applied to nearly every VA purchase or refinance loan. It ranges from 0.5% to 3.3% of the loan amount. Veterans receiving compensation for a service-connected disability are typically exempt from this fee.
Is there a maximum VA loan limit?
As of 2020, there are no longer "loan limits" for Veterans with full entitlement. This means you can borrow as much as a lender is willing to provide without a down payment, provided you meet credit and income requirements.
Do VA loans require PMI?
No. One of the biggest advantages of using the va mortgage calculator is seeing the savings from not having Private Mortgage Insurance. The federal government guarantees the loan, which replaces the need for borrower-paid insurance, saving you hundreds of dollars per month.