Compare today's VA refinance rates

What are VA refinance rates?

VA refinance rates are mortgage rates for VA cash-out refinance loans and Interest Rate Reduction Refinance Loans (IRRRLs), also known as VA streamline loans. VA mortgage rates are typically lower than mortgage rates for conventional or FHA loans.

A VA loan is a mortgage that requires no down payment, no mortgage insurance and is available to active-duty military, veterans, certain military spouses, reservists and National Guard members. The VA loan program, backed by the U.S. Department of Veterans Affairs, aims to help service members and veterans enjoy the benefits of homeownership.

What are VA streamline refinance rates?

VA streamline refinance rates are mortgage rates for Interest Rate Reduction Refinance Loans (IRRRLs). These mortgages are also known as VA streamline refinance loans because the lending approval process is simplified, saving time, paperwork and fees.

To refinance into an IRRRL, you must already have a VA mortgage. The interest rate must be lower on your new loan, unless you're refinancing out of a VA loan with an adjustable rate.

VA IRRRLs don't let you extract cash from refinancing, except a limited amount for energy-efficient improvements.

What are VA cash-out refinance rates?

VA cash-out refinance rates refer to mortgage rates for VA cash-out refinance loans. With a VA cash-out refinance, you can refinance your current mortgage — whether it's VA or conventional — into a new VA loan and tap into some of your home's equity.

Any VA refinance loan that's not an IRRRL is known as a VA cash-out refinance, even if you don't take out any cash.

How do I find the current VA refinance rates?

NerdWallet's mortgage rate tool can help you find competitive, customized VA refinance rates. In the filters above, enter a few details about your current VA loan. In moments, you'll get a rate quote tailored to meet your needs, without having to provide any personal information. From there, you can start the process of getting approved for a VA refinance with a lender. It's that easy.

What is a good VA refinance rate?

A good VA refinance rate is one with the lowest combination of rate and fees. VA refinance rates fluctuate, so a rate that's good one day may be mediocre on another. The only way to find the lowest VA refinance rate is to compare rate quotes from multiple lenders.

Do VA loans have better refinance rates?

VA loans generally have lower mortgage rates than conventional and FHA loans. Your rate will depend on the lender and your personal financial details, such as your credit score.

Which lenders offer competitive VA refinance rates?

The only way to find the lender with the right VA refinance rate for you is to compare lenders and their rates and fees.

With a Loan Estimate from each lender compared side-by-side, you'll be able to see which lender is giving you a good mortgage rate combined with the lowest origination fees.

How can I get a low VA refinance rate?

Maintaining a good credit score and applying to multiple lenders to compare quotes will help you get the lowest VA refinance rate.

Will VA refinance rates go up?

Average mortgage rates fluctuate daily and are influenced by the economy's overall rate of growth, the inflation rate and the health of the job market. Unpredictable events can affect all of those factors. See NerdWallet's monthly mortgage interest rates forecast to get our take.

How much does a VA refinance cost?

Your VA refinance rate will affect the overall cost of borrowing. The lower the rate, the lower your monthly mortgage payment will be.

Other costs include a VA funding fee. As of April 7, 2023, the fee for an IRRRL is 0.5% of the loan value, and for cash-out refis the fee varies from 2.15% to 3.3%. (The fee is waived for some veterans with service-connected disabilities, certain surviving spouses and active-duty service members who received a Purple Heart.)

You'll also be responsible for other closing costs, such as appraisals and inspections.

Who can take advantage of VA refinance rates?

If you have a mortgage and are eligible for the VA loan program, backed by the U.S. Department of Veterans Affairs, you can apply for VA loan refinancing.

You can refinance one VA loan into another with a VA Interest Rate Reduction Refinance Loan. You can refinance a VA or conventional loan into a VA cash-out refinance loan.

Is it a good idea to refinance a VA loan?

To refinance using the IRRRL (VA streamline refinance) program, the new loan must have a lower interest rate. The exception is when you refinance from an adjustable-rate mortgage into a fixed-rate loan. Either way, the VA assumes that the refinance is a good idea, because you're getting a lower rate or the predictability of a fixed rate.

A VA cash-out refinance requires you to pass what's called the Net Tangible Benefit test. To pass the NTB test, the refinanced loan has to save you money in one way or another, or pay off a construction loan, or switch from an ARM to a fixed rate.

How soon can you refinance a VA loan?

When you do a VA cash-out refinance from one VA loan to another, there's a minimum period that must elapse between loan closings. At least 210 days must pass between the first payment of the original loan and the closing date of the new loan, and you must have made at least six monthly payments on the original loan.

Pros and cons of a VA refinance

Pros

Refinance for up to 100% of the value: Qualified VA borrowers may refinance for up to 100% of the home's value, including the funding fee, if it's rolled into the loan amount.

No mortgage insurance: Even refinancing at 100%, VA borrowers don't pay mortgage insurance. Instead, they pay a funding fee.

Lenient loan qualifying standards: The VA has no minimum credit score requirement, although lenders often require credit scores of 620 or higher. When assessing affordability, the VA looks at how much money is left over after the borrower's monthly expenses.

Con

Funding fee: Although VA loans don't have mortgage insurance, they do have a funding fee that's paid at closing. The funding fee varies from 2.15% to 3.3% of the loan amount for cash-out refinances, and 0.5% of the loan amount for IRRRLs.

How are mortgage rates set?

At a high level, mortgage rates are determined by economic forces that influence the bond market. You can't do anything about that, but it's worth knowing: Bad economic or global political worries can move mortgage rates lower. Good news can push rates higher.

What you can control are the amount of your down payment and your credit score. Lenders fine-tune their base interest rate on the risk they perceive to be taking with an individual loan.

So their base mortgage rate, computed with a profit margin aligned with the bond market, is adjusted higher or lower for each loan they offer. Higher mortgage rates for higher risk; lower rates for less perceived risk.

So the bigger your down payment and the higher your credit score, generally the lower your mortgage rate.

» MORE: Get your credit score for free

What’s the difference between interest rate and APR?

The interest rate is the percentage that the lender charges for borrowing the money. The APR, or annual percentage rate, is supposed to reflect a more accurate cost of borrowing. The APR calculation includes fees and discount points, along with the interest rate.

APR is a tool used to compare loan offers, even if they have different interest rates, fees and discount points.

A major component of APR is mortgage insurance — a policy that protects the lender from losing money if you default on the mortgage. You, the borrower, pay for it.

Lenders usually require mortgage insurance on loans with less than 20% down payment (in a home purchase) or less than 20% equity (in a refinance).

» MORE: What is APR and how does it affect your mortgage?

Learn more about VA loans:

• How to refinance a VA loan

• NerdWallet's refinance calculator

• VA loan: What it is and how it can help you