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Mortgage & Loans
VA Loan Calculator — Funding Fee, Loan Amount & Monthly Payment
The $0-down loan for veterans: funding fee, financed loan amount and monthly payment — and why there's no PMI
The VA loan is the most powerful home-financing benefit most veterans, active-duty service members and eligible surviving spouses will ever have. Backed by the U.S. Department of Veterans Affairs, it lets qualified buyers purchase a primary home with $0 down and — critically — no private mortgage insurance (PMI) ever, no matter how little you put down. That alone can save a borrower hundreds of dollars a month compared with a conventional or FHA loan at the same price.
There is one trade-off to plan for: the VA funding fee. This is a one-time charge the VA collects to keep the program running for future borrowers. It is a percentage of the loan amount, and most buyers finance it into the loan rather than paying cash, so it quietly increases the balance you borrow.
How the funding fee works. The rate depends on your down payment and whether this is your first VA loan or a subsequent use:
• First use, 0% down → 2.15% • First use, 5%–9.99% down → 1.50% • First use, 10%+ down → 1.25% • Subsequent use, 0% down → 3.30% • Subsequent use, 5%+ down → 1.50% / 1.25%
If you receive VA disability compensation (or qualify as an exempt surviving spouse or Purple Heart recipient), the funding fee is $0 — a major saving. Always check the VA exemption box if it applies to you.
The formula.
Funding fee = base loan × fee rate. Base loan = home price − down payment. Total loan = base loan + financed funding fee. Then monthly P&I = M = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), where P is the total loan, r is the APR ÷ 1200, and n is years × 12.
Worked example. Buy a $400,000 home with $0 down, first VA use, not exempt. Funding fee = 400,000 × 2.15% = $8,600. Financed into the loan, your total balance is $408,600. At 6.5% over 30 years: r = 0.00541667, n = 360, so M ≈ $2,583/month in principal and interest — and there is no PMI line to add on top.
The most common mistake is forgetting that the financed funding fee makes you borrow more than the home price. With $0 down on a $400,000 house you don't owe $400,000 — you owe $408,600, because the fee rides along inside the loan. The second mistake is paying the funding fee when you're actually exempt: VA-rated disabled veterans should never be charged it, so confirm your status before closing.
This tool provides informational estimates only, not a loan offer or financial advice. Your actual funding fee, rate and payment are set by the VA and your lender; property tax and homeowners insurance are not included here.
📖 See also: FHA vs Conventional vs VA Loan: Which Fits?
Calculator
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📰 Formula
• Base loan = home price − down payment • Funding fee % depends on down payment and first vs subsequent use (0% if VA-exempt) • Funding fee $ = base loan × (fee % / 100) • Total loan P = base loan + financed funding fee • Monthly rate r = APR ÷ 12 ÷ 100 • Number of payments n = years × 12 • Monthly P&I = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1) • No PMI on a VA loan, ever
📰 Formula
• Base loan = home price − down payment • Funding fee % depends on down payment and first vs subsequent use (0% if VA-exempt) • Funding fee $ = base loan × (fee % / 100) • Total loan P = base loan + financed funding fee • Monthly rate r = APR ÷ 12 ÷ 100 • Number of payments n = years × 12 • Monthly P&I = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1) • No PMI on a VA loan, ever
🧪 Worked examples
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Example 4
⚠️ Common mistakes
- Forgetting the financed funding fee makes the loan larger than the home price.
- Paying the funding fee when you're VA-exempt (disabled veterans owe $0).
- Using the subsequent-use rate (3.3%) when it's actually your first VA loan, or vice versa.
- Adding PMI — a VA loan never carries private mortgage insurance, even at $0 down.
💡 Tips
- Putting 5% or 10% down lowers your funding fee rate and your monthly payment.
- If you draw VA disability compensation, you're exempt from the funding fee — confirm it before closing.
- You can pay the funding fee in cash at closing instead of financing it to keep your loan balance down.
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❓ Frequently asked questions
How is the VA funding fee calculated?
It's a percentage of your base loan amount (home price minus down payment). With $0 down on your first VA loan the rate is 2.15%, so a $400,000 loan has an $8,600 funding fee. Most buyers finance it into the loan.
Do VA loans require a down payment?
No. A core benefit of the VA loan is $0 down on a primary home for eligible borrowers. You can still put money down to shrink the loan and lower the funding fee rate, but it isn't required.
Do VA loans have PMI?
Never. VA loans carry no private mortgage insurance regardless of your down payment, which is why they're often cheaper monthly than conventional or FHA loans even with nothing down.
Who is exempt from the VA funding fee?
Veterans receiving VA disability compensation, certain Purple Heart recipients, and eligible surviving spouses are exempt and pay $0. Check the VA-exempt box if any of these apply to you.
What's the difference between first use and subsequent use?
First use is your first VA-backed loan; subsequent use is any VA loan after that. With $0 down, first use is 2.15% and subsequent use jumps to 3.30%. Putting 5%+ down brings both down to about 1.50% or 1.25%.
Is the funding fee added to my loan or paid upfront?
Either. Most borrowers finance it into the loan, which raises the balance and the monthly payment slightly. You can also pay it in cash at closing to keep your loan amount lower.
How much is the monthly payment on a $400,000 VA loan?
With $0 down, first use, the financed total is about $408,600 after the funding fee. At 6.5% over 30 years that's roughly $2,583 per month in principal and interest, with no PMI added.
Does putting money down lower the VA funding fee?
Yes. Going from $0 down to 5% down drops the first-use rate from 2.15% to 1.50%, and 10%+ down lowers it to 1.25%. A down payment also reduces the loan you finance overall.
Are property taxes and insurance included in this estimate?
No. This calculator shows principal and interest plus the funding fee only. Add your annual property tax and homeowners insurance separately to get your full monthly PITI payment.