VA Home Loan Percentage Explained: How to Secure the Best VA Mortgage Rate in 2025

What Is the VA Home Loan Percentage?

The “VA home loan percentage” refers to the interest rate assigned to your VA mortgage. This rate directly impacts your monthly mortgage payment and the total interest paid over the life of your loan.

The key to saving thousands? Locking in a competitive VA mortgage rate tailored to your financial profile and market timing.

Key Takeaways

• VA loan rates are often lower than conventional mortgage rates, helping you save significantly over time.
  
• The VA does NOT have a minimum credit score requirement. Any number you're shown is a lender overlay. However, many lenders look for a 620+ score for better rate offers. VA Handbook 26-7, Chapter 4
  
• Federal Reserve policy influences VA rates. Tracking interest rate trends can help you decide when to lock.
  

Refinance options like the VA IRRRL (Interest Rate Reduction Refinance Loan) often offer streamlined paperwork and reduced rates.

Current VA Mortgage Rates (March 2025)

5 Key Factors That Affect Your VA Loan Interest Rate

1. Your Credit Score

The VA does not set a minimum credit score. Lenders often require 620 or higher, but manual underwriting is available for lower scores in some cases.

Citation: VA Handbook 26-7, Chapter 4

Tip: Improving your credit score can drop your interest rate by up to 0.50% or more.

2. Federal Reserve Rate Policy

Mortgage rates—including VA—are influenced by the Federal Reserve’s interest rate decisions. When the Fed raises rates, mortgage rates tend to follow.

Keep an eye on the Federal Reserve’s rate announcements.

3. Loan Term Length

• 15-Year VA Loans: Lower rates, higher payments.
  
• 30-Year VA Loans: Higher rates, lower payments.
  

If you can afford higher monthly payments, a shorter loan term can save you tens of thousands in interest.

4. Loan Type (Purchase vs. Refinance)

• Purchase Loans: Standard VA rates.
  
• VA IRRRL (Streamline Refinance): Often lower rates with no appraisal or income verification required.
  

Reference: VA IRRRL Guidelines - VA.gov

5. Your Lender

Not all VA lenders offer the same rate—even for the same borrower profile.

Always compare rates from 3–5 VA-approved lenders or work with a VA mortgage broker who can shop for you.

VA Loans vs. Conventional Loans: Which Saves You More?

Note: VA limits certain closing costs that can be charged to the borrower. Learn more in VA Pamphlet 26-7, Chapter 8.

How to Lock In the Lowest VA Mortgage Rate (Step-by-Step)

1. Check Today’s Rates

Use trusted sites like:

• Bankrate
  
• Freddie Mac PMMS
  
• [Lender marketplaces]
  

2. Get Pre-Qualified

Pre-qualification gives you an idea of what you can afford—and shows sellers you’re serious.

3. Work with a VA Mortgage Broker

Brokers can often find lower rates than direct lenders because they shop your profile across multiple sources.

Common VA Loan Rate Myths—Busted

Myth: All VA lenders offer the same rate.
Truth: Each lender sets its own rates, fees, and credit score overlays.

Myth: VA loans are only for first-time buyers.
Truth: You can use your VA entitlement multiple times—even after foreclosure.

Myth: You can’t refinance with a VA loan.
Truth: The VA IRRRL and cash-out refinance options are both available.

FAQs

How does my credit score impact my VA loan percentage?

While the VA doesn’t set a score minimum, most lenders look for 620+ for the best rates. Lower scores may still qualify with compensating factors.

Can I refinance my VA loan for a better rate?

Yes. The VA IRRRL allows eligible borrowers to refinance at a lower rate with minimal documentation.

Do VA loans have better rates than conventional loans?‍

Typically, yes. VA loans usually offer 0.25%–0.50% lower interest rates compared to conventional.

Your Next Steps

Want the lowest VA loan percentage possible?

• Compare rates online or with a VA mortgage broker.
  
• Understand your VA entitlement, credit profile, and eligibility.
  
• Consider Be My Neighbor Mortgage to explore AI-powered rate comparisons and commission-free real estate options with reAlpha.
  

Be My Neighbor Mortgage, LLC | NMLS #1743790

‍This is not a commitment to lend. All loans are subject to credit and underwriting approval. Rates and terms are subject to change based on market conditions and borrower qualifications.