- VA loan
- A mortgage guaranteed by the U.S. Department of Veterans Affairs for eligible veterans, service members and certain surviving spouses. It allows up to 100% financing and does not require monthly mortgage insurance. Instead, most borrowers pay a one-time funding fee, which this calculator adds to the loan amount.
- VA funding fee
- A one-time fee charged as a percentage of the base loan. For first use it is 2.15% with under 5% down, 1.5% with 5% to under 10% down, and 1.25% with 10% or more; subsequent use with under 5% down is 3.3% (VA, effective April 7, 2023). The calculator finances it into the loan.
- Funding fee exemption
- Some borrowers pay no funding fee, including veterans receiving VA disability compensation, Purple Heart recipients on active duty and certain surviving spouses. Selecting the exemption sets the fee to zero, which lowers the total loan amount and the monthly payment. Your Certificate of Eligibility shows whether you are exempt.
- First vs. subsequent use
- Whether you have used your VA home loan benefit before. With under 5% down, a subsequent-use borrower pays a higher funding fee: 3.3% versus 2.15% for first use (VA, effective April 7, 2023). With 5% or more down, the rate is the same either way, so a down payment matters more for repeat users.
- Down payment
- Cash paid toward the purchase at closing. A VA loan does not require one, but putting down 5% or more lowers the funding fee rate, and every dollar down also reduces the base loan, the fee charged on it and the interest paid. The calculator applies the fee tier that matches your down payment percentage.
- Base loan amount
- The home price minus your down payment, before the funding fee is added. The funding fee is calculated as a percentage of this figure. With no down payment, which is common on VA loans, the base loan equals the full purchase price. Every dollar of down payment therefore lowers the fee itself, not just the amount borrowed.
- Total loan amount
- The base loan plus the financed funding fee: the balance your monthly payments actually repay. Financing the fee avoids paying it in cash at closing, but you pay interest on it for the life of the loan. With zero down, the total loan is more than the purchase price, so you start with slightly negative equity.
- Principal and interest (P&I)
- The part of the monthly payment that repays the total loan amount and covers interest, calculated with the standard amortization formula. It is the monthly payment this calculator shows. Property taxes and homeowners insurance are not included; with escrow, they would be added to reach your full monthly housing payment.
- Total interest
- The sum of all interest paid over the full term: the monthly payment times the number of payments, minus the total loan amount. It includes interest on the financed funding fee. It assumes the loan is kept to maturity with no extra payments; a shorter term or a lower rate reduces it most.
