VA loan calculator: zero down, no PMI, one funding fee
The VA benefit removes the two costs that dominate low-down-payment lending — the down payment and monthly mortgage insurance — and replaces them with a single upfront funding fee. Here is what that looks like on a real payment.
Down payment: $0 · Loan amount: $400,000
Estimated monthly payment
$3,179.54
Where your monthly payment goes
- Principal & interest$2,46377%
- Property taxes$36712%
- Homeowners insurance$1505%
- Mortgage insurance (PMI)$2006%
- Principal & interest
- $2,462.87
- Property taxes
- $366.67
- Homeowners insurance
- $150.00
- Mortgage insurance (PMI)
- $200.00
With less than 20% down, this estimate adds PMI at roughly 0.6% of the loan per year. Reaching 20% equity typically lets you cancel it.
VA loans carry no monthly mortgage insurance. Ignore the PMI line above and use the funding-fee tables below for the VA-specific cost.
How the VA funding fee works
The VA does not lend money. It guarantees a portion of the loan, which is why a private lender will finance 100% of the purchase price without mortgage insurance. The funding fee is what keeps that guaranty program self-funded, and it is charged once — at closing or financed into the balance.
| Down payment | First use | Subsequent use |
|---|---|---|
| Less than 5% | 2.15% | 3.30% |
| 5% to 9.99% | 1.50% | 1.50% |
| 10% or more | 1.25% | 1.25% |
Borrowers with a service-connected disability rating and certain surviving spouses pay no funding fee at all.
Worked example: $400,000 home, nothing down, 6.25% for 30 years
| Line item | Amount | Notes |
|---|---|---|
| Down payment | $0 | Full entitlement, 100% financing |
| Funding fee (2.15%) | $8,600 | First use, financed into the loan |
| Total financed | $408,600 | Purchase price plus funding fee |
| Principal & interest | $2,516/mo | 360 payments at 6.25% |
| Monthly mortgage insurance | $0 | VA loans never charge it |
| Property taxes (1.1%) | $367/mo | Escrowed with the payment |
| Homeowners insurance | $150/mo | $1,800 per year |
| Estimated total payment | $3,033/mo | PITI, no MI |
A funding-fee-exempt borrower finances $400,000 instead, dropping principal and interest to about $2,463 per month — roughly $53 less, or $19,000 across the term.
VA against FHA and conventional
On the same $400,000 house, the difference is not the interest rate — it is what gets added on top of it. A VA borrower pays no monthly insurance for the entire loan. An FHA borrower with 3.5% down pays roughly $175 per month in annual MIP for as long as the loan exists, about $63,000 over 30 years. A conventional borrower with 5% down pays PMI until reaching 20% equity, typically five to eight years of payments.
The main argument for putting money down on a VA loan is not to avoid insurance — it is to cut the funding fee from 2.15% to 1.5%, reduce the balance, and strengthen your offer in a competitive market. If you are exempt from the fee, zero down is almost always the mathematically efficient choice.
What VA loans will not do
- Investment property. The home must be your primary residence, though one- to four-unit properties qualify if you live in one unit.
- Fixer-uppers with safety issues. VA Minimum Property Requirements cover the roof, mechanical systems, water supply and pest damage, and appraisers do enforce them.
- Skip closing costs. The fee structure is limited and the seller can contribute, but title, appraisal, escrow and prepaids are still real money.
VA loan questions
Do VA loans really require nothing down?+
Yes, for eligible borrowers with full entitlement, VA loans allow 100% financing up to the appraised value. You still owe closing costs, prepaid taxes and insurance, though the seller or lender can cover some of them.
What is the VA funding fee?+
A one-time fee paid to the VA in place of monthly mortgage insurance. For a first-use purchase with nothing down it is 2.15% of the loan; it falls to 1.5% with 5% down and 1.25% with 10% down, and rises to 3.3% on subsequent uses with no down payment.
Who is exempt from the funding fee?+
Veterans receiving VA compensation for a service-connected disability, those rated eligible for it, Purple Heart recipients on active duty, and certain surviving spouses. Exemption is confirmed on your Certificate of Eligibility.
Is there a VA loan limit?+
Borrowers with full entitlement have no VA-imposed loan limit — the lender's own maximum and your qualifying income set the ceiling. County limits still matter if you have reduced entitlement from another active VA loan.
Can I use a VA loan more than once?+
Yes. Entitlement is restored when a prior VA loan is paid off, and in some cases you can hold two VA loans at once with remaining entitlement. The funding fee is higher on later uses unless you are exempt.
Do VA loans have higher rates?+
Typically the opposite. VA rates often run slightly below comparable conventional rates because of the government guaranty, and there is no monthly mortgage insurance layered on top.
Not eligible for VA? Compare the FHA 3.5%-down route instead.