VA Loan Calculator
A VA loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs and available to eligible veterans, active-duty service members, National Guard and Reserve members, and certain surviving spouses. It is one of the most generous loan benefits in the country for a single reason: it lets qualified buyers purchase a home with no down payment at all and no private mortgage insurance (PMI) — two costs that weigh down almost every other low-down-payment option.
There is one cost the VA does charge, and it surprises people who expect the benefit to be entirely free: the VA funding fee. It is a one-time charge, set as a percentage of the loan, that funds the program so taxpayers do not have to. For a first-time use with no money down, that fee is 2.15% of the loan. Most borrowers do not pay it in cash — they roll it into the loan balance, which is why a "zero-down" VA loan can actually finance slightly more than the home's price.
Take the default scenario: a $350,000 home with nothing down. The base loan is $350,000, the 2.15% funding fee adds $7,525, and the total financed loan becomes $357,525. At an illustrative 6.25% over 30 years, the principal-and-interest payment is $2,201 a month — with no PMI on top of it. The rates here are illustrative: your real funding fee depends on your down payment and whether this is your first use of the benefit, and your interest rate depends on your lender and credit profile.
How the calculator builds a VA loan payment
Step 1 — Base loan amount
With a VA loan you can put nothing down, so the base loan is usually the full purchase price:
Base loan = Home price × (1 − down payment %) = $350,000 × (1 − 0%) = $350,000
Step 2 — VA funding fee
The funding fee is a percentage of the base loan and is normally financed (added to the balance), not paid in cash:
| Item | Formula | This scenario |
|---|---|---|
| Funding fee | Base loan × 2.15% | $350,000 × 2.15% = $7,525 |
| Total financed loan | Base loan + funding fee | $350,000 + $7,525 = $357,525 |
Because the fee is rolled in, you pay interest on it over the life of the loan — so the convenience of not paying it up front has a small long-run cost.
Step 3 — Principal & interest (P&I)
P&I uses the standard amortization formula on the financed loan (price plus funding fee):
P&I = L × r / (1 − (1 + r)⁻ⁿ)
where L is the financed loan, r is the monthly rate (annual rate ÷ 12) and n is the number of months (years × 12). Here: $357,525 at 6.25% ÷ 12 over 360 months = $2,201 per month.
What a VA loan does not charge
Unlike FHA or low-down conventional loans, a VA loan has no monthly mortgage insurance. That is the whole point — there is no PMI line item, so the $2,201 above is your full loan payment (before property taxes, homeowners insurance and any HOA, which a lender collects separately in escrow).
Worked example: a $350,000 home, 0% down
Assumptions: a 6.25% fixed interest rate over 30 years and a 2.15% funding fee (first use, no down payment — all illustrative; confirm your own figures with a lender).
| Item | Amount |
|---|---|
| Home price | $350,000 |
| Down payment (0%) | $0 |
| Base loan amount | $350,000 |
| VA funding fee (2.15%, financed) | $7,525 |
| Total financed loan | $357,525 |
| Monthly principal & interest | $2,201 |
| Monthly mortgage insurance | $0 (none) |
Two things are worth sitting with.
- No PMI is a real, recurring saving. An FHA loan on the same $350,000 home (3.5% down) would cost roughly $2,271 a month including its $155 of monthly mortgage insurance, versus $2,201 here. The VA loan also asks for $12,250 less cash at closing, because you put nothing down.
- The funding fee is the trade-off. Rolling the $7,525 fee into the loan pushes the balance to $357,525 and, over 30 years at 6.25%, the financed loan costs about $434,958 in total interest. The fee is a one-time price for a benefit you can reuse — and some veterans, such as those receiving disability compensation, are exempt from it entirely.
Run your own numbers above, then pair this with FiMo's FHA, mortgage and loan-comparison calculators to see which structure fits your cash and your timeline.
Frequently asked questions
What is a VA loan and who qualifies?
A VA loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs, open to eligible veterans, active-duty service members, National Guard and Reserve members, and some surviving spouses. Its two signature benefits are no down payment and no private mortgage insurance. In the default example, a $350,000 home with nothing down means a base loan of $350,000, a 2.15% funding fee of $7,525, a financed loan of $357,525 and a $2,201/month payment.
How is the VA loan monthly payment calculated?
Your VA payment is principal & interest only — there is no monthly mortgage insurance. The funding fee is added to the loan, then P&I uses the standard amortization formula L × r / (1 − (1 + r)⁻ⁿ) on that financed balance. Worked example: a $350,000 base loan plus a $7,525 funding fee gives a $357,525 loan; at 6.25% over 30 years that is $2,201 a month. Property taxes and homeowners insurance are extra, collected in escrow.
What is the VA funding fee and do I pay it in cash?
The VA funding fee is a one-time charge that keeps the loan program self-sustaining. For a first use with no down payment it is 2.15% of the loan — on a $350,000 loan that is $7,525. Most borrowers do not pay it at closing; they finance it into the loan balance, which is why the financed loan ($357,525) is larger than the home price. That convenience means you pay interest on the fee over the life of the loan.
Does a VA loan have PMI or mortgage insurance?
No. A VA loan has no private mortgage insurance (PMI) and no monthly mortgage insurance premium of any kind, even with zero down. That is the feature that makes it cheaper month to month than comparable low-down-payment options. On the $350,000 example the monthly payment is just the $2,201 of principal and interest, whereas an FHA loan on the same home would add roughly $155 of monthly mortgage insurance on top of its payment.
VA loan vs FHA loan: which is cheaper?
For an eligible borrower the VA loan is usually cheaper. It needs no down payment and no monthly mortgage insurance; the FHA needs 3.5% down and charges MIP for the life of the loan. On the $350,000 example, the VA payment is $2,201/month versus about $2,271/month for FHA, and the VA route asks for $12,250 less cash up front. The VA's cost is the one-time 2.15% funding fee ($7,525), which most people finance into the loan.
Who is exempt from the VA funding fee?
You are generally exempt from the VA funding fee if you receive VA disability compensation, if you are a Purple Heart recipient on active duty, or if you are an eligible surviving spouse. For an exempt borrower the $7,525 in the example simply disappears, so the financed loan drops from $357,525 back to the $350,000 base loan and the monthly payment falls accordingly. This calculator lets you set the funding fee to 0% to model that case.