VA Mortgage Rates for May 2022


VA loans are mortgages for active or retired members of the military and their spouses, backed by the US Department of Veterans Affairs. They have more favorable terms than traditional mortgages and offer financial benefits to eligible service members, such as lower rates. If you’re a new homeowner looking to save money by locking in a lower interest rate, especially as interest rates climb this year, a VA loan could be an appealing option. 

Current VA loan rate trends

Mortgage rates are increasing at their fastest pace in two decades — and they’re expected to keep going up. Interest rates have hiked as the Federal Reserve raises its benchmark interest rate to contain skyrocketing inflation, and more hikes are expected throughout 2022.  

Right now, rates for a 30-year fixed-rate conventional mortgage are between 5% and 6%, while the interest rate for a 30-year fixed-rate VA loan is just below 5%. Even half a percentage point can make a huge difference in the amount of interest you’ll pay over the course of your mortgage. Keep in mind that although VA loans have lower rates than conventional loans, they still rise and fall with overall rate trends. 

Still, under the current economic conditions and state of the real estate market, locking in a low rate is even more valuable for prospective homeowners. If you’re ready to buy a home, it’s likely that your interest rate will be lower if you apply for a mortgage now as opposed to later on in the year. 

What are VA loans and how do you qualify for one?

Because VA loans are backed by the government, they allow service members and their spouses to buy a home with less stringent requirements and more favorable terms than other types of home loans. For example, you can qualify for a VA loan with a lower credit score than conventional loans, and you’re not required to make a down payment. (While almost all other kinds of mortgages require at least a 3% minimum down payment, some 90% of VA loans are made with no down payment.) A VA loan is also more secure than a conventional mortgage since it’s guaranteed by the government, and not just by banks or private lenders. 

These loans do have funding fees, which can range from 1.4% to 3.6% of your loan amount. However, you can opt to roll this fee into your mortgage.

To qualify for a VA loan you must be either an active or retired service member, or the spouse of one. Members of the National Guard and Reserve members are also eligible. The requirements for the amount of time served vary depending on your dates of service, but you’re normally required to have at least 90 consecutive days of service.   

Pros of a VA loan

  • No down payment required: Almost all types of home loans require a down payment, but if you take out a VA loan you can put 0% down to buy a home. 
  • Lower credit score requirements: Most conventional loans require a credit score of 620, but some lenders accept lower credit scores with VA loans.
  • Lower interest rates: VA loans generally have lower interest rates and APRs than conventional loans.
  • No mortgage insurance is required: With conventional loans, when you make a down payment less than 20%, you’re typically required to get private mortgage insurance, which can add hundreds of dollars to your monthly mortgage payment. With a VA loan, no PMI is required, no matter the size of your down payment.

Cons of a VA loan

  • Narrow eligibility requirements: If you aren’t an active service member, retired service member or the spouse of one, you don’t qualify for a VA loan. You must provide a Certificate of Eligibility to qualify. 
  • VA funding fee: There is a one-time funding fee that other types of loans don’t require. 
  • Primary residences only: In most cases, you can only use a VA loan to buy a primary residence and not a second home or an investment property.  

Mortgage rates compared

Loan type Interest rate APR
30-Year Fixed-Rate VA 4.83% 4.95%
30-Year Fixed Rate 5.42% 5.44%
30-Year Fixed-Rate FHA 4.57% 5.39%
30-Year Fixed-Rate Jumbo 5.37% 5.39%

*Rates as of May 20, 2022.

We use information collected by Bankrate, which is owned by the same parent company as CNET, to track daily mortgage rate trends. The above table summarizes the average rates offered by lenders across the country.

FAQs

How do I find the lowest VA loan rate?

As with all home loans, shopping around with different mortgage lenders is critical to securing the lowest mortgage rate possible. The more lenders you interview, the greater the likelihood you’ll find a lower rate. According to Freddie Mac, prospective homeowners can save an average of $1,500 over the life of their loan just by getting one extra quote, and an average of $3,000 by getting five quotes.

Can I get a VA refinance loan?

Yes, you can refinance with a VA loan. There is a cash-out refinance option as well as an Interest Rate Reduction Refinance Loan, or streamlined refinance, which can help you refinance at a lower interest rate, saving you money in interest as you pay off your new loan.

If you take out a VA loan you’ll have to pay a one-time funding fee when you close on your home. You can pay the fee upfront or finance it over time by rolling it into your mortgage. The amount of the fee will depend on the type of loan and the size of the loan. For instance, if your down payment is less than 5%, your fee will cost 2.3% of your loan. If you make a down payment between 5% and 10%, the fee will only be assessed at 1.65% of your loan.

There are some exceptions to the VA loan funding fee requirement. For example, an active duty service member who has received a Purple Heart does not have to pay the funding fee. Keep in mind, however, that you’ll still have to pay other standard lender fees that all buyers must pay when purchasing a house, such as closing costs.  

More mortgage tools and resources 

You can use CNET’s mortgage calculator to help you determine how much house you can afford. The CNET mortgage calculator factors in variables like the size of your down payment, home price and interest rate to help you figure out how large of a mortgage you may be able to afford. Using the CNET mortgage calculator can also help you understand how much of a difference even a slight increase in rates makes in how much interest you’ll pay over the lifetime of your loan.

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