Published 5:04 am ET March 22, 2023
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The Department of Veterans Affairs (VA) offers VA home loans to veterans, current military members and their spouses. These home loans can be used to buy, build or repair a home.
Like other types of mortgages, various lenders offer these home loans with different requirements and rates. If you’re looking for a VA mortgage, here’s how to find the best rate for your future home.
Current VA mortgage rates
As of March 15, the average interest rate for a 30-year fixed VA purchase loan is 6.27%. This is down from the week prior which was 6.58% and up significantly from last year’s 4.14%. For a 15-year fixed-rate VA loan, interest rates are currently 6.21%, down slightly from 6.34%.
The average interest rate for a 30-year VA mortgage refinance is 6.93%, down from the previous week’s 7.12%.
What experts say about VA mortgage rates
Russell Fernandes, a mortgage banker at Ameris Bank, says mortgage rates are inconsistent and very much still in flux.
“The Federal Reserve has said they plan to continue raising rates in 2023 which indirectly affects mortgage rates,” he says. “However, I expect it will be at a slower pace than in 2022.”
Veterans, active service members or spouses eligible for a VA loan can expect a few benefits. Aside from not requiring a down payment for eligibility, borrowers with the best credit can get a lower rate than other types of loans.
“VA rates are generally lower than conventional rates,” Fernandes says. “VA [loans] allow buyers to get more house [compared to] conventional as well.”
Fernandes says that using a VA loan specialist can help you determine your VA loan rate based on your credit profile, market conditions and what you can afford, adding that it’s still a good time to buy even if rates are higher than a year or two ago.
“It’s a great time to buy because there are fewer buyers shopping right now,” he adds. “If rates fall, just refinance.”
How to qualify for a VA loan
Not everyone is eligible for a VA loan. To get one, you’ll need to:
- Be an active service member, veteran, member of the National Guard, reserve or the surviving spouse of a veteran.
- Meet the minimum active duty service requirements (which vary based on when you served).
Keep in mind: Some exceptions apply as well, including hardships, medical conditions, a disability and others. However, you might still be eligible for a VA loan even with these exceptions.
How to get a VA loan
VA loans don’t require a down payment, but you can still put money down, especially if it helps make your monthly payments smaller and more affordable. Here’s how to apply:
- Check your credit score. Before exploring funding options, check your credit score and report. If you find any errors, fix them and focus on paying off any outstanding debt. Credit is a major factor when determining your interest rate — the higher your score, the lower your rate will be — so it’s a good idea to improve your credit score as much as possible before you apply.
- Compare lenders. Compare rates, fees and closing costs with multiple lenders to find the right fit for your needs. While big banks offer VA loans, consider looking at other institutions like credit unions, community banks and online lenders.
- Get pre-approved. Consider pre-approval as well as that can help you know just how much house you can afford and make you more attractive to sellers — as it tells them you’re a serious buyer). You can complete multiple pre-approval applications with multiple lenders within two weeks without getting multiple hits to your credit score. Major credit bureaus recognize these applications and know you’re rate shopping.
- Find a home and prepare for closing. Once you’re pre-approved it’s time to find the right home for you. Then, you’ll gather any documents needed to start the closing process with the buyer (and lender of your choice).
Fixed-rate VA loans vs. adjustable-rate VA loans
There are two types of rates for VA loans:
- Fixed-rate mortgages: Fixed-rate loans have one set interest rate for the duration of the term. Rates for 30-year loans are typically higher than 15-year loans, but you’ll have lower monthly payments. However, because you’re paying off your loan for longer, you’ll pay more in total interest over the life of the loan. A 15-year mortgage usually means a lower interest rate and paying less in interest compared to 30-year mortgages, but your monthly payments might be higher.
- Adjustable-rate mortgages (ARMs): Some lenders offer adjustable-rate mortgages for VA loans just like those on conventional loans. ARMs have a fixed interest rate for a set amount of time and then adjust the rate each year after. For instance, a 5/1 ARM means the interest rate stays the same for the first five years of the loan, and then adjusts every year after that. Keep in mind that rates can go up and down based on market conditions. Some VA ARMs include 3/1, 5/1 and 7/1.
Frequently asked questions (FAQs)
When looking at home loan rates, you’ll usually see two numbers: the interest rate and the APR. The interest rate is the annual cost of a loan a lender charges to a borrower. It’s a percentage of the total loan amount. The annual percentage rate (APR), however, is the annual cost of the loan plus any additional fees. This typically includes mortgage insurance, closing costs, discount points, loan origination fees and more.
Like other types of loans, your lender determines your VA mortgage rate based on where you’re buying your home, your credit profile, the loan type and other factors. The Department of Veterans Affairs does not set VA mortgage rates.
The funding fee is a one-time fee paid by the borrower on a VA loan. Because VA loans don’t require down payments or mortgage insurance — like other mortgages might — this helps lower the cost of the loan for taxpayers.
You can get the best VA mortgage rate by shopping around and comparing many different lenders. The lowest interest rate offered by one lender might not be the lowest available right now. However, you have a better chance of securing the lowest interest rate with the highest credit score and a solid credit history of on-time payments and low credit usage.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
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