VA Mortgage Rates: Lowest Of All Today’s Mortgage Rates

Looking for the absolute lowest mortgage rate available? Consider using a VA loan.

According to data from mortgage software firm Ellie Mae, loans via the VA Loan Guaranty program carry lower mortgage rates, on average, than FHA loans, USDA loans, and conventional loans via Fannie Mae and Freddie Mac.

At today’s mortgage rates, VA loans can be locked in the mid-3s.


The VA loan is a benefit available to veterans and active members of the U.S. military. The program is backed by the Department of Veterans Affairs and, in many ways, is identical to mortgages backed by other government agencies.

VA loans are made with a specific, starting loan size; a fixed or adjustable mortgage rate; and loan term of up to 30 years; and, an obligation to make repayments to the bank.

VA loans come with specific traits, however, which make them unique.

As one example, VA loans are assumable. This means that when you sell a home with VA financing attached to it, the buyer of your home can, literally, assume your mortgage and its payments.

Assumable loans are especially valuable in a rising mortgage rate environment. Imagine if you could sell your home and its 3-percent mortgage rate at time when rates are closer to the historical average near 8 percent.

Your home will be cheaper to own by multiples as compared to your neighbors.

Another unique VA loan trait is access to the VA Streamline Refinance. Also known as the Interest Rate Reduction Refinance Loan (IRRRL), the VA Streamline Refinance is among the simplest refinance programs around. There is no credit score check, no income verification, and no appraisal of your home.

VA Streamline Refinance loans typically close within a few weeks.


Each month, Ellie Mae publishes its Origination Insight Report which is a detailed look at trends in mortgage lending. Ellie Mae software handles more than 3.5 million loan transaction annually and the sample size of its report exceeds fifty percent.

The July Origination Insight Report shows VA mortgage rates lower than conventional or FHA mortgage rates.

The average VA mortgage rate for July, excluding discount points, was 4.11 percent. By comparison, FHA loans averaged 4.26 percent and conventional loans averaged 4.51.

The savings go bigger than that, though.

VA loans don’t require mortgage insurance. FHA loans and conventional loans do. So, for mortgage applicants making a downpayment of less than twenty percent; or with little home equity for a refinance, VA mortgage savings are magnified.

On a low-downpayment loan, mortgage insurance for an FHA loan or conventional loans can add $110 to a monthly mortgage payment. This is why VA loans can be so much less expensive.

As compared to a comparable FHA loan, VA loans cost 26.4% less.

If you think you may be VA loan-eligible, apply and see what you can save.


Realtor with Greg Garrett Realty, actively licensed in the state of Virginia

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