VA Calculator Use
This va calculator is designed specifically for veterans, active-duty service members, and eligible surviving spouses to estimate their monthly mortgage payments and the impact of the VA Funding Fee. Unlike conventional loans, VA loans offer unique benefits such as zero down payment and no Private Mortgage Insurance (PMI).
By using this tool, you can visualize how different home prices, interest rates, and funding fee tiers affect your long-term financial commitment. It provides a breakdown of the base loan versus the total amount financed if you choose to roll the funding fee into the loan balance.
- Home Price
- The total purchase price of the property you intend to buy.
- Down Payment
- While VA loans often require $0 down, any amount you pay upfront reduces the base loan amount and may lower your funding fee percentage.
- VA Funding Fee
- A one-time fee paid to the Department of Veterans Affairs. It usually ranges from 1.25% to 3.3% depending on your down payment and whether it is your first time using the benefit.
How It Works
The va calculator uses the standard amortization formula to calculate the Principal and Interest (P&I) payment. Because the VA Funding Fee is typically rolled into the loan, the principal amount (P) is often higher than the base price of the home.
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
- M: Total monthly payment.
- P: The total loan amount (Home Price – Down Payment + VA Funding Fee).
- i: The monthly interest rate (Annual rate divided by 12).
- n: The total number of monthly payments (Years multiplied by 12).
Calculation Example
Example: A first-time user of the VA loan benefit is purchasing a home for $400,000 with $0 down payment. The current interest rate is 6% for a 30-year term. The VA Funding Fee for a first-time user with zero down is 2.15%.
Step-by-step solution:
- Base Loan = $400,000 – $0 = $400,000
- Funding Fee = $400,000 * 0.0215 = $8,600
- Total Financed Loan (P) = $400,000 + $8,600 = $408,600
- Monthly Rate (i) = 0.06 / 12 = 0.005
- Number of Months (n) = 30 * 12 = 360
- Calculation: M = 408,600 [ 0.005(1.005)^360 ] / [ (1.005)^360 – 1 ]
- Monthly P&I Payment = $2,449.77
VA Funding Fee Tiers (2024)
The funding fee varies based on your down payment amount and whether you have used the VA loan benefit before. Below is a general guide for regular service members:
| Down Payment | First Use | Subsequent Use |
|---|---|---|
| Less than 5% | 2.15% | 3.30% |
| 5% or more | 1.50% | 1.50% |
| 10% or more | 1.25% | 1.25% |
Common Questions
Does the VA loan require PMI?
No. One of the biggest advantages found in this va calculator is the absence of Private Mortgage Insurance (PMI). Since the VA guarantees a portion of the loan, lenders do not require PMI, even with $0 down payment.
Who is exempt from the VA Funding Fee?
Veterans who receive disability compensation for a service-connected disability, or those who are eligible to receive it but receive retirement pay instead, are typically exempt from paying the funding fee. Surviving spouses of veterans who died in service or from a service-connected disability are also exempt.
Can I pay the funding fee upfront?
Yes. While most borrowers choose to roll the fee into the loan to minimize out-of-pocket costs, you can choose to pay it in cash at closing. This reduces your total loan amount and interest paid over the life of the mortgage.