6 min read May 22, 2024

VA Loan Rates 2024: Here’s How Much You Need to Pay

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Carol Coutinho

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Carol Coutinho

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On May 24th, 2024, the national average for a 30-year VA loan is 6.82%. That’s less but it is a decrease compared to last week’s rate of 6.84%. Veterans can thus lock in a marginally lower interest rate, which could result in financial savings throughout the loan. 

Also, this loan provides a route to homeownership, particularly in terms of interest rates and other benefits. So, let us take a closer look at VA loan rates and discover why they are lower. Get in touch with a lender to get pre-approved!

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What Is a VA Loan?

The Department of Veterans Affairs provides VA loans to support veterans and active service members. It makes financing options more accessible and private lenders, including banks, credit unions, and mortgage companies, offer these loans. 

It provides favorable terms and conditions, like no private mortgage insurance, lower interest rates, and no down payment

What Are the Current VA Mortgage Rates?

The Federal Reserve rate, bond market yields, and overall economic conditions are some of the variables that affect VA rates. The current VA loan rates are: 

VA Loan TypeInterest RateAPRPoints
30-Year VA Purchase with Fixed Rate6.375%6.832%1.6880 ($4979.60)
30-Year VA Jumbo Fixed Purchase
(Predicted on a loan amount of $766,551)
6.750%7.092%0.3750 ($2874.57)
Fixed VA Purchase for 20 Years6.375%6.977%1.6880 ($4979.60)
30-Year Refinance for VA Cash-Out7.125%7.548%1.1250 ($3318.75)
30-Year Streamline Refinance (IRRRL)6.375%6.707%2.0000 ($5900.00)
30-Year Streamline Jumbo Refinance (IRRRL)
(Predicted on a $766,551 loan balance.)
6.990%7.261%1.2500 ($9581.89)
Source: Veterans United

How Are VA Loan Rates Calculated?

The Department of Veterans Affairs does not directly determine the interest rate on a VA loan.  Instead, private lenders such as banks and mortgage companies, determine the interest rate based on the following factors:

Who Sets the Interest Rate for the VA Loan

  • Market Conditions: The Federal Reserve’s monetary policy, market trends, and inflation are all taken into account by lenders. However, the state of the market may affect interest rates overall. 
  • Loan Amount and Loan-to-Value (LTV) Ratio: The loan-to-value ratio impacts the mortgage interest rate. Higher LTV ratios or larger loan amounts may result in higher interest rates.
  • Discount Points: To reduce their interest rate, borrowers can pay discount points in advance. One percent of the loan amount corresponds to each discount point. The interest rate can be lowered by paying extra points.
  • Creditworthiness: Your income, debt-to-income ratio (DTI), and credit score are factors that lenders consider when assess your likelihood of repaying a loan. Borrowers with better credit histories typically qualify for lower interest rates.
  • Loan Characteristics: The loan amount, loan type (purchase vs. refinance), and loan term (15 vs. 30 years), all affect the interest rate that is offered.

30-Year Fixed Rates on a Mortgage vs. VA Home Loan 

In conventional mortgages, 30-year fixed rates are slightly higher than VA home loan rates.

Features 30- Year Fixed Rate VA Home Loan 
Loan TypeConventional LoanDepartment of Veterans Affairs loan backed by the government 
EligibilityAvailable to all eligible borrowersExclusive to active military personnel, veterans, and certain surviving spouses
Down PaymentTypically, it requires a minimum down payment, often 3-20%In most cases, no down payment is needed.
Interest RatesHigher than VA loans, on averageTypically lower than conventional loans

Eligibility Requirements for VA Mortgage

To qualify for a VA loan, you have to fulfill the following conditions:

Minimum Service Length

The minimum active duty service requirement depends on when you served:

  • Wartime: 90 days of active duty service
  • Peacetime: 181 days of active duty service

Use of Entitlement 

While there are not exactly “exemptions” from being eligible for a VA loan. There are a few situations where the down payment requirement might not apply.  Here is how it works:

  • Full Entitlement: If you have never before used your VA benefits or if a previous VA loan has been paid off and the property has been sold, you are fully entitled.   Moreover, for full entitlement loans under $144,000, there is not a cap, but lenders may have them.
  • Reduced Entitlement: Your entitlement amount is lowered if you have previously used your VA benefit and have not paid it off or if the property has not been sold. Depending on the loan amount and remaining entitlement, a down payment might be needed for this.
  • Bonus Entitlement: Loans over $144,000 are eligible for this. Depending on the loan amount and county loan limits, you may still be eligible for additional benefits even after your basic benefits have been exhausted. 

Military Service Requirements

  • Reserves or National Guard: Under a federal order, you must have served for 90 days with at least 30 days of continuous active duty.  Or you must have served honorably for at least 6 years in the National Guard or Reserves.
  • Survivor Spouse: You may be qualified if you are the spouse of a member of the armed forces who passed away on duty. Additionally, if they suffered a disability as a result of their service, you may also qualify.

Other Requirements

  • Creditworthiness: The lender will require a minimum credit score of 600 and above.
  • Income and Debt: To find out if you can afford the monthly mortgage payment, an assessment of your income and debt will be made.  For a VA loan, a debt-to-income ratio of 41% is acceptable.
  • Property Appraisal: To guarantee that the property you are buying is a secure investment, it must adhere to VA appraisal standards.

Benefits of VA Loan

VA Loans provide several advantages that can lower the cost and increase the accessibility of homeownership for veterans, active-duty military personnel, and their qualifying spouses.

  • No Down Payment Needed: VA loans stand out for allowing zero-down purchases, a huge benefit for those short on savings.
  • Decreased Closing Costs: VA loans often boast lower closing costs than conventional loans
  • Reduced Interest Rates: VA loans typically offer lower interest rates, saving you money each month.
  • Absence of Private Mortgage Insurance (PMI): VA loans eliminate PMI, saving you money every month.

Bottom Line

VA loans often have lower interest rates than conventional mortgages, which saves a lot of money each month over the course of the loan. Private mortgage insurance (PMI), which is normally necessary for conventional loans with a down payment of less than 20%, is also frequently waived or reduced with VA loans. 

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Frequently Asked Questions

How much does the rate on my VA loan depend on my credit score?

A major determinant of your VA loan rate is your credit score. Strong credit scores (usually greater than 600) usually qualify borrowers for the best rates.

What are the closing costs associated with a VA loan?

VA loans usually have lower closing costs than conventional loans. This is so that, in certain circumstances, the VA funding fee, a one-time expense, can be included in the loan amount. Furthermore, when a VA loan is used, sellers might be more inclined to pay closing costs.

How much time does a VA loan usually take to close?

A VA appraisal is an extra step in the loan closing process, so it might take a little longer than for a conventional loan. Through this appraisal, the VA's specific standards are met by the property.

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