Quick answer
A VA loan calculator adds the VA funding fee to your payment instead of PMI. On a $375,000 home with no down payment, first use, 6.5% over 30 years, the 2.15% fee is $8,062.50, the financed loan is $383,062.50, and the total monthly payment is $2,921.22 including tax and insurance — with no PMI, ever.
How the VA Loan Calculator works, step by step
The funding fee is the VA's one-time charge for guaranteeing your loan, set by your down payment and whether you have used a VA loan before. First use costs 2.15% with less than 5% down, 1.5% at 5% or more, and 1.25% at 10% or more. Subsequent use costs 3.3% below 5% down, then the same 1.5% and 1.25%. The fee applies to the loan amount, not the purchase price.
Some borrowers pay no funding fee at all. You are exempt if you receive VA compensation for a service-connected disability, or would but take retirement or active-duty pay instead; if you are a surviving spouse receiving Dependency and Indemnity Compensation (DIC); or if you are an active-duty service member who received a Purple Heart before closing. A later disability award backdated to before closing earns the fee back.
Most borrowers finance the fee, rolling it into the loan — the only closing cost VA rules allow you to finance on a purchase. The price: you pay interest on the fee for 30 years. In the worked example below, financing an $8,062.50 fee adds $50.96 a month and costs $10,283.10 of extra interest over the term. Paying the fee in cash at closing avoids all of it, if you have the money spare.
VA loans never charge private mortgage insurance — the funding fee replaces it, so there is no PMI line in the payment. Your payment is principal and interest plus property tax and homeowners insurance, with HOA dues on top when they apply. Before you apply you need a Certificate of Eligibility (COE), confirming your service record and entitlement; your lender can usually pull it from the VA in minutes.
A down payment is optional on a VA loan, but it is the cheapest way to cut the fee. On a $375,000 purchase, putting 5% down drops a subsequent-use fee from 3.3% to 1.5% — from $12,375 on the full loan to $5,343.75 on a $356,250 loan. At 10% down the rate is 1.25% for everyone. The calculator shows the fee at each tier.
The formula
Funding fee = base loan × fee rate, where the base loan is the price minus the down payment. Monthly principal and interest = loan × [r(1 + r)^n] ÷ [(1 + r)^n − 1], where r is the monthly rate and n the number of payments. Total monthly payment = principal and interest + tax + insurance + HOA. VA loans charge no PMI.
Worked example — try it on the calculator above
Worked example: $375,000 home, 0% down, first use at 6.5%
With no down payment, the base loan is $375,000. The first-use fee at 2.15% is $8,062.50, and financing it makes the loan $383,062.50. Principal and interest on that amount at 6.5% over 360 payments is $2,421.22 a month. Property tax of $4,125 a year adds $343.75 and insurance of $1,875 a year adds $156.25, so the total payment is $2,921.22. Total interest over the term is $488,576.70. Paying the fee in cash instead would cut the payment to $2,370.26 and save $10,283.10 of interest.
Frequently Asked Questions
How much is the VA funding fee?
It depends on your down payment and whether you have used a VA loan before. On a purchase, first use costs 2.15% of the base loan with less than 5% down, 1.5% at 5% or more, and 1.25% at 10% or more. Subsequent use costs 3.3% below 5% down, then the same 1.5% and 1.25%. The fee is charged on the loan amount, not the purchase price. These rates come from the VA funding fee table on VA.gov, effective April 7, 2023.
Who is exempt from the VA funding fee?
You pay no funding fee if you receive VA compensation for a service-connected disability, or would receive it but take retirement or active-duty pay instead; if you are a surviving spouse receiving Dependency and Indemnity Compensation (DIC); or if you are an active-duty service member who received a Purple Heart before closing. If the VA later awards you disability compensation with an effective date before your closing, you can claim a refund of the fee you paid.
Should I finance the funding fee or pay it in cash?
Financing is convenient — most borrowers roll the fee into the loan — but you pay interest on it for the whole term. On a $375,000 first-use loan at 6.5% over 30 years, financing an $8,062.50 fee costs $10,283.10 of extra interest. Paying cash at closing avoids all of it. The trade is liquidity: cash spent on the fee is cash you cannot use for moving costs or an emergency fund.
Do VA loans require PMI or a down payment?
Neither. VA loans never charge private mortgage insurance — the one-time funding fee replaces it — and no down payment is required unless the lender asks for one or the price exceeds the home's reasonable value. A down payment is still worth considering: 5% down cuts a subsequent-use fee from 3.3% to 1.5%, and 10% down brings every borrower to 1.25%.
Estimates, not advice. This calculator provides educational estimates based on the inputs you enter and the assumptions shown on this page. It is not financial, tax or investment advice, and it cannot see your full situation. Verify important figures against official sources, and consider a qualified professional for decisions about your own money. See our Disclaimer and Methodology.