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Which loan wins? It depends on the funding fee and time
$400,000 home: VA with 0% down at 6% vs conventional with 5% down at 6.5% and 0.6% PMI. In this example the VA payment is $2,966 a month vs $3,109 — check real rate quotes, which vary by lender and credit.
| Your VA situation | Keep 5 years | Keep 10 years | Keep 30 years |
|---|---|---|---|
| First VA loan, 0% downFunding fee $8,600 | VA by $4,027 | VA by $17,261 | VA by $28,406 |
| Later VA loan, 0% downFunding fee $13,200 | Conv. by $1,908 | VA by $10,102 | VA by $18,477 |
| Exempt from the funding feeFunding fee $0 | VA by $15,124 | VA by $30,645 | VA by $46,968 |
"Cost to own" difference: cash at closing + all loan and PMI payments + balance still owed. Taxes, insurance and HOA are the same for both.
VA funding fee 2026 (purchase loans)
| Down payment | First use | After first use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% to less than 10% | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
Percent of the loan amount, effective 2023-04-07. Source: VA — funding fee and closing costs (checked 2026-10-15).
VA vs conventional: the rules side by side
| VA | Conventional | |
|---|---|---|
| Who qualifies | Eligible veterans, service members and some surviving spouses (Certificate of Eligibility) | Anyone who meets lender requirements |
| Minimum down payment | 0% | 3% (first-time buyer programs), otherwise usually 5% |
| Monthly mortgage insurance | None | PMI under 20% down, until the balance reaches 78% of the price |
| Upfront fee | Funding fee 1.25%–3.3% (exemptions apply) | None |
| Loan limit | None with full entitlement | $832,750 conforming limit (2026, most areas) |
| Property | Must be your primary residence | Primary, second home or investment |
Run each loan on its own with the VA loan calculator and the conventional loan calculator, or compare FHA vs conventional.
Assumptions
- Same home, taxes, homeowners insurance and HOA for both loans, so those are left out of the cost comparison.
- VA: no monthly mortgage insurance; the one-time funding fee from the current VA fee table (first or later use, by down payment) unless exempt. Conventional: PMI at the rate you enter, ending at 78% of the price.
- Closing costs other than the funding fee, and what your down payment could earn elsewhere, aren't included.
Frequently asked questions
Is a VA loan better than a conventional loan?+
For most eligible buyers, yes: VA loans need no down payment, have no monthly mortgage insurance and often lower rates. The one-time funding fee (2.15% on a first-use, no-down-payment loan) is the main cost — and many veterans with a service-connected disability don't pay it. Conventional can win if you put 20% down (no PMI) and get a similar rate, or if you'd pay the higher 3.3% fee on a later VA loan.
How much is the VA funding fee in 2026?+
For a purchase loan used for the first time: 2.15% with less than 5% down, 1.5% with 5–10% down and 1.25% with 10% or more. After the first use: 3.3% with less than 5% down (the lower tiers are the same). It can be rolled into the loan.
Who doesn't have to pay the VA funding fee?+
Exempt groups include: Veterans receiving VA compensation for a service-connected disability; Veterans rated eligible for compensation (pre-discharge or pending); Surviving spouses receiving Dependency and Indemnity Compensation (DIC); Active-duty service members who received a Purple Heart.
Does a VA loan have PMI?+
No. VA loans have no monthly mortgage insurance at any down payment. Conventional loans charge PMI with less than 20% down until the balance falls to 78% of the home's price.
Is there a loan limit on VA loans?+
Veterans with full entitlement have no VA loan limit — lenders still decide how much you can borrow. Conventional (conforming) loans are capped at $832,750 for a one-unit home in most of the country in 2026.
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Uses 2026 rules and limits. Last reviewed October 21, 2026. Calculator version 1.0.0. Sources: VA funding fee and loan closing costs (official) · Veterans United — VA Funding Fee chart · VA Loan Network — VA Funding Fee 2026 · FHFA — Conforming Loan Limit Values for 2026. Results are estimates for educational purposes, not financial, tax or lending advice. How we check our numbers. Embed this calculator on your site for free.