VA loans skip monthly mortgage insurance entirely, but they replace it with a one-time funding fee that this calculator finances into the loan — and that fee depends heavily on two things borrowers underestimate: whether it's your first VA loan, and how much you put down. On a $350,000 loan with nothing down, using your entitlement a second time roughly triples the effective jump over a first-time low-down-payment fee.
One fee, financed once, instead of insurance paid every month
The VA funding fee is what replaces mortgage insurance on a VA loan — there is no monthly PMI or MIP charge here, at any down payment, including 0% down. Instead, the Department of Veterans Affairs charges a single percentage of the base loan amount, added to the loan balance the same way FHA's upfront premium is, rather than billed monthly.
| Down payment | First use | Subsequent use |
|---|---|---|
| Under 5% | 2.15% | 3.3% |
| 5% to under 10% | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
Rate chart effective April 7, 2023, current as of this calculator's last VA data check in January 2026. Applies to the base loan amount, not the home price.
Two things about that table are easy to miss. First, the down-payment bands are identical for first and subsequent use once you've put down 5% or more — the penalty for having used your entitlement before only shows up at the lowest down payment tier. Second, the fee is calculated on the base loan (home price minus down payment), so a larger down payment shrinks the fee twice over: once by lowering the loan amount the percentage applies to, and again by moving you into a lower percentage tier.
A worked example: first use versus a second VA loan
Take a $350,000 home with 0% down, financed at the Freddie Mac PMMS rate for the week of September 3, 2026 — 6.71% on a 30-year term.
$26 a month sounds small, but it compounds over three decades into thousands of dollars of extra interest on a fee you never had to pay upfront — because it's financed and accruing interest right alongside the rest of the loan. Now compare what a down payment does instead of a second use:
Ten percent down does more for the funding fee than eligibility status does: it cuts the fee by nearly half through the lower rate tier, on top of shrinking the loan it's calculated against.
How the funding fee stacks up against FHA's upfront charge
Both VA and FHA loans finance a one-time charge into the loan balance rather than billing it upfront, which makes them directly comparable in dollar terms. On the same $350,000 purchase with 0% down, FHA's flat 1.75% upfront MIP would come to $6,125. A first-use VA borrower at 0% down pays more in dollar terms — $7,525, at the 2.15% first-use rate — but that's the entire cost of the VA loan's insurance-equivalent charge. FHA layers a recurring monthly MIP of $155 or more on top of its smaller upfront fee, for as long as the loan carries a 90%-plus starting LTV, which a 0%-down FHA loan always does. A VA loan never adds that monthly layer, at any down payment.
That's the shape of the trade worth understanding before comparing quotes side by side: VA's charge can be the larger of the two upfront, but it's also the only charge — there's no monthly VA insurance line waiting to show up on your closing disclosure or your statement five years from now.
The fee some veterans don't pay at all
Not every VA borrower pays a funding fee. Per the VA's own funding fee page, veterans receiving VA compensation for a service-connected disability, and certain surviving spouses of veterans who died in service or from a service-connected disability, are exempt from the funding fee entirely. This calculator does not model that exemption — if you qualify, treat the funding-fee line in your results as $0 and remove it from the financed loan amount by hand.
The same VA rate chart also covers loan types this calculator doesn't: an Interest Rate Reduction Refinance Loan (IRRRL) carries a flat 0.5% fee, well below any purchase-loan tier, while a cash-out refinance charges 2.15% first use and 3.3% subsequent use, with no down-payment bands at all. If you're pricing a refinance rather than a purchase, those figures — not the purchase table above — are the relevant ones.
No monthly mortgage insurance means nothing to lose on the tax side, either
Because a VA loan carries no ongoing mortgage insurance, there's no monthly premium to weigh against a tax deduction — a genuine structural advantage over FHA and low-down conventional loans, which both carry a monthly insurance charge that IRS Publication 936 confirms is no longer deductible at all: "the itemized deduction for mortgage insurance premiums has expired." The VA funding fee itself is a financed cost, not an insurance premium, and it isn't deductible either — but at least there's only one such charge to account for, not one that recurs every month for the life of the loan.
Methodology
Funding fee tiers and rates are this calculator's own constants, matching the VA's published purchase/construction rate chart effective April 7, 2023 (page last confirmed current in January 2026). Worked examples use the September 3, 2026 Freddie Mac PMMS 30-year rate (6.71%) on a $350,000 purchase. Exemption criteria, the IRRRL rate, and the cash-out refinance rates are the VA's published figures for loan types this calculator does not itself compute.
Sources
- U.S. Department of Veterans Affairs — VA Funding Fee and Closing Costs — accessed 2026-09-05
- Freddie Mac — Primary Mortgage Market Survey, week ending September 3, 2026 — accessed 2026-09-05
- IRS — Publication 936, Home Mortgage Interest Deduction (2025) — accessed 2026-09-05