How this calculator works
A VA loan is a mortgage guaranteed by the US Department of Veterans Affairs. The guarantee lets a lender offer better terms because part of the loss is covered if the borrower defaults. In exchange, most borrowers pay a one-time funding fee, which can be financed into the loan. The fee depends on whether the entitlement has been used before and on the size of the down payment: a first-time buyer with nothing down pays 2.15% of the loan, and a borrower who has used the entitlement before pays 3.30%. At 5% down the fee drops to 1.50%, and at 10% or more to 1.25%, whichever use it is. Some borrowers are exempt, notably veterans receiving compensation for a service-connected disability and surviving spouses. A full-entitlement borrower can buy up to the county conforming loan limit with no down payment, because the guaranty of 25% of the loan fits inside the entitlement. Above that limit the lender generally requires a down payment of at least 25% of the excess. The maximum guaranty shown here is 25% of the loan, capped at 25% of the county limit. VA loans also carry a monthly property tax and insurance escrow and a VA funding fee that most borrowers finance; those are outside this calculation. The page is about the US programme and has no Canadian equivalent, though Canadian veterans may qualify for other assistance.
Formula
Loan = home price - down payment. Down payment rate = down payment / home price. Funding fee rate = 2.15% or 3.30% below a 5% down payment (first or subsequent use), 1.50% at 5% to 9.99%, and 1.25% at 10% or more, or zero when exempt. Funding fee = loan x rate. Total loan = loan + fee. Monthly payment = total loan x i / (1 - (1 + i)^-n), with i the monthly rate and n the number of monthly payments. Maximum guaranty = 25% of the smaller of the total loan and the county limit. Required down payment = 25% of the amount by which the price exceeds the county limit.
Worked example
A $400,000 home with no down payment, a first use and a 6.5% rate over 30 years. The base loan is $400,000 and the funding fee at 2.15% is $8,600, so the total loan is $408,600. The monthly principal and interest payment is $2,582.63 and the total interest over 360 payments is $521,147. The maximum guaranty is 25% of the $408,600 loan, or $102,150. The county limit is above the price, so no extra down payment is required. With $40,000 down instead, the fee falls to 1.50% and the payment is on a smaller loan.
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Frequently asked questions
Can the funding fee be financed?
Yes, in most cases. The fee is added to the loan balance, which is why the total loan here is larger than the price less the down payment. Financing it raises the monthly payment and the interest paid.
Who is exempt from the funding fee?
Veterans receiving VA compensation for a service-connected disability, veterans who would be receiving it but for retirement pay, surviving spouses of veterans who died in service or from a service-connected disability, and some members with a Purple Heart. Confirm with the VA before relying on an exemption.
Is the county limit the same everywhere?
No. Limits are set annually by the Federal Housing Finance Agency and are higher in high-cost counties. The default here is the 2025 baseline limit for a one-unit property; enter your county figure from the FHFA or VA table.
Does this include property tax and insurance?
No. It covers principal, interest and the funding fee only. Add property tax, homeowners insurance and any HOA dues separately, because the lender will count them in the monthly housing cost.
Is there a Canadian equivalent?
Not for the VA programme, which is specific to US military service. Canadian buyers with a down payment under 20% use mortgage default insurance instead; the payment arithmetic is the same.