The VA home loan program, guaranteed by the U.S. Department of Veterans Affairs, offers significant benefits to eligible service members, veterans, and surviving spouses, including the potential for no down payment and competitive interest rates. Understanding how your monthly payment is calculated is crucial. This calculator helps estimate your total monthly obligation, factoring in the loan principal, interest, and the one-time VA Funding Fee.
How the VA Funding Fee Works
The VA Funding Fee is a one-time charge paid by the borrower to the VA. This fee helps the VA offset the cost of defaults and keeps the program running for future generations of veterans. The amount of the funding fee varies based on several factors, including:
The type of loan (e.g., purchase, refinance).
Whether it's a first-time or subsequent use of the VA loan benefit.
The amount of down payment, if any.
Service type (e.g., regular military, National Guard/Reserves, astronaut, spouse).
A common funding fee for regular military borrowers using their benefit for the first time on a purchase with no down payment is 2.15% (as of 2023, subject to change). This fee can be financed into the loan amount, meaning you don't pay it out-of-pocket at closing, but it increases your total loan principal and thus your monthly payments.
The Calculation Explained
Our VA Home Loan Calculator uses a standard mortgage payment formula and incorporates the VA Funding Fee.
Total Loan Amount Calculation: The VA Funding Fee is added to the initial loan amount. If the funding fee is 2.15% and the loan is $300,000, the funded fee amount is $300,000 * 0.0215 = $6,450. The total amount financed becomes $300,000 + $6,450 = $306,450.
Principal and Interest (P&I) Payment: The core of your monthly payment is calculated using the standard mortgage formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Monthly Payment (P&I)
P = Total Loan Amount (including the financed funding fee)
i = Monthly Interest Rate (Annual Rate / 12)
n = Total Number of Payments (Loan Term in Years * 12)
For example, for a $306,450 loan at 4.5% annual interest over 30 years:
Monthly Interest Rate (i) = 0.045 / 12 = 0.00375
Number of Payments (n) = 30 * 12 = 360
Plugging these into the formula gives the monthly P&I payment.
Amortization of Funding Fee: While the funding fee is paid upfront to the lender (and then to the VA), it's typically financed into the loan. The calculator estimates how much of your monthly payment effectively goes towards paying down the portion of the loan that represents the funding fee. This is often approximated by dividing the total funded fee amount by the number of months in the loan term.
Total Estimated Monthly Payment: This is the sum of the calculated Monthly Principal & Interest (P&I) and the estimated portion of the monthly payment attributed to the financed Funding Fee.
Important Considerations
This calculator provides an estimation and does not include other costs associated with homeownership, such as:
Property Taxes
Homeowners Insurance
Private Mortgage Insurance (PMI) – generally not required for VA loans, but other fees might apply
HOA Dues (if applicable)
Potential VA annual fees (for certain refinance types)
It's essential to consult with a VA-approved lender for a precise Loan Estimate and to understand all terms, conditions, and applicable fees for your specific situation. The VA Funding Fee rate can change, so always verify the current rate with your lender.
function calculateVAHomeLoan() {
var loanAmountInput = document.getElementById("loanAmount");
var interestRateInput = document.getElementById("interestRate");
var loanTermInput = document.getElementById("loanTerm");
var vaFundingFeeInput = document.getElementById("vaFundingFee");
var loanAmount = parseFloat(loanAmountInput.value);
var annualInterestRate = parseFloat(interestRateInput.value);
var loanTermYears = parseInt(loanTermInput.value);
var vaFundingFeePercentage = parseFloat(vaFundingFeeInput.value);
var resultDiv = document.getElementById("result");
var totalMonthlyPaymentSpan = resultDiv.querySelector(".total-monthly-payment");
var monthlyPIspan = resultDiv.querySelectorAll(".detail-item span")[0];
var monthlyFeePortionSpan = resultDiv.querySelectorAll(".detail-item span")[1];
var totalLoanAmountSpan = resultDiv.querySelectorAll(".detail-item span")[2];
if (isNaN(loanAmount) || loanAmount <= 0 ||
isNaN(annualInterestRate) || annualInterestRate < 0 ||
isNaN(loanTermYears) || loanTermYears <= 0 ||
isNaN(vaFundingFeePercentage) || vaFundingFeePercentage 0) {
monthlyPIPayment = totalLoanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else {
// Handle 0% interest rate case
monthlyPIPayment = totalLoanAmount / numberOfPayments;
}
// Estimate the monthly portion of the funding fee
var estimatedMonthlyFundingFeePortion = fundingFeeAmount / numberOfPayments;
// Calculate total estimated monthly payment
var totalEstimatedMonthlyPayment = monthlyPIPayment + estimatedMonthlyFundingFeePortion;
// Format and display results
totalMonthlyPaymentSpan.textContent = formatCurrency(totalEstimatedMonthlyPayment);
monthlyPIspan.textContent = formatCurrency(monthlyPIPayment);
monthlyFeePortionSpan.textContent = formatCurrency(estimatedMonthlyFundingFeePortion);
totalLoanAmountSpan.textContent = formatCurrency(totalLoanAmount);
}
function formatCurrency(amount) {
return "$" + amount.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}
// Initialize calculator on load with default values
document.addEventListener("DOMContentLoaded", function() {
calculateVAHomeLoan();
});