VA Refinance Calculator
ℹ RefinanceUSA is not a lender. Results are estimates — disability exemption eligibility must be confirmed with VA. How we calculate
VA Refinance Advantages vs. Conventional
VA refinancing offers structural advantages that don't exist on conventional loans — and they apply every time you refinance, not just on purchase.
| Feature | VA IRRRL | Conventional Refi |
|---|---|---|
| Appraisal required | No | Yes ($400–$700) |
| Full income verification | No (minimal) | Yes |
| PMI / MIP | Never | Required if LTV > 80% |
| Funding fee (IRRRL) | 0.5% (waived if disabled) | N/A — but full closing costs 2–3% |
| Rate requirement | Must be lower than current (fixed-to-fixed) | No rule |
| Net tangible benefit | Required | Not required |
| Underwater OK? | Yes (no appraisal) | No — LTV limits apply |
One more advantage: the VA sets no official minimum credit score for the IRRRL — lender overlays often start at 580–620, far more accessible than conventional's typical 620–660 requirement with heavy LLPA pricing adjustments. If you have lower credit but are VA-eligible, the IRRRL is almost always your best refinance path. See our guide to refinancing with bad credit for a full program comparison by score range.
VA Funding Fee Rates (2026)
| Loan Type | First Use | Subsequent Use | Disability Exempt |
|---|---|---|---|
| IRRRL (any use) | 0.50% | 0.50% | 0% |
| Cash-Out Refinance | 2.15% | 3.30% | 0% |
| Purchase (5% down) | 1.40% | 1.40% | 0% |
The IRRRL's 0.5% funding fee is significantly lower than conventional refinancing's 2–3% total closing costs at comparable loan sizes. On a $350,000 IRRRL, the funding fee is $1,750 vs. $7,000–$10,500 in typical conventional closing costs.
3 VA Refinance Scenarios
Scenario 1 — IRRRL: Classic rate-drop refinance
$350K balance, 7.25% → 6.25%, no appraisal needed
| Loan balance | $350,000 at 7.25% |
| New rate | 6.25% / 30-year |
| Monthly P&I savings | $233/mo |
| VA funding fee (0.5%, financed) | $1,750 (added to loan) |
| Other closing costs | $2,200 |
| Total upfront cost | $2,200 (fee financed) |
| Break-even | 10 months |
| 5-year net savings | +$11,780 |
The IRRRL's low total closing cost — funding fee financed, minimal other fees — produces a 10-month break-even. A conventional refinance of the same loan at 2% closing costs would cost $7,000 and take 30 months to break even. The VA IRRRL is categorically better when eligible.
Scenario 2 — Disability-exempt IRRRL: Virtually free refinance
Zero funding fee + minimal closing costs
| Loan balance | $420,000 at 7.50% |
| New rate | 6.50% / 30-year |
| Monthly savings | $280/mo |
| VA funding fee | $0 (disability exempt) |
| Other closing costs | $1,800 (title, recording) |
| Break-even | 6 months |
| 5-year net savings | +$14,997 |
| 10-year net savings | +$31,800 |
Veterans receiving VA disability compensation are exempt from the funding fee. Combined with the IRRRL's already-minimal closing costs, a disability-exempt veteran can refinance for as little as $1,500–$2,500 total — achieving break-even in 5–7 months. This is one of the best deals in the mortgage market.
Scenario 3 — Cash-out refinance: Accessing equity at VA rates
$300K balance, $420K home value, $60K cash-out
| Current balance + rate | $300,000 at 7.0% |
| New loan | $360,000 at 6.75% / 30-yr |
| VA funding fee (3.3% subsequent) | $11,880 (financed) |
| New monthly P&I | $2,335/mo |
| Old monthly P&I | $1,996/mo |
| Monthly payment increase | +$339/mo |
| Cash received | $60,000 |
The VA cash-out allows veterans to access up to 100% LTV — something no conventional loan permits. However, the 3.3% subsequent-use funding fee is significant ($11,880 on $360K), and taking cash out while the rate increases adds monthly payment burden. This path is most attractive when the cash replaces high-rate debt or funds investments that return more than 6.75%.
IRRRL Eligibility Requirements
- Existing VA loan required: You must already have a VA-backed loan. You cannot use the IRRRL to refinance a conventional or FHA loan.
- Rate must decrease (fixed-to-fixed): If refinancing from one fixed-rate to another, the new rate must be lower than the current rate.
- Fixed-to-ARM rule: If moving from a fixed rate to an ARM, the new rate must be at least 2% lower than the current fixed rate.
- Net tangible benefit: The loan must reduce your interest rate and/or provide another clear financial benefit (e.g., moving from ARM to fixed for payment stability).
- No cash out: IRRRL is rate-and-term only. Maximum $500 cash back at closing.
- Primary residence or prior occupancy: The property must be or previously was your primary residence.
- 6-payment seasoning: You must have made at least 6 monthly payments on your current VA loan.
Frequently Asked Questions
What is a VA IRRRL?
The VA Interest Rate Reduction Refinance Loan (IRRRL) is a streamlined refinance for veterans with an existing VA loan. No appraisal needed, minimal income documentation. The new rate must be lower than the current rate (for fixed-to-fixed), and the refinance must provide a net tangible benefit.
What is the VA funding fee for an IRRRL?
The IRRRL funding fee is 0.5% of the loan amount — the same rate regardless of how many times you've used your VA benefit. Veterans receiving VA disability compensation pay 0%. This is dramatically lower than conventional refinancing closing costs of 2–3%.
Do I need an appraisal for a VA IRRRL?
No appraisal required. This protects veterans in declining markets or with negative equity — you can refinance even if your home is worth less than you owe. The lender uses an automated valuation or the original appraisal.
How much can I save with a VA IRRRL?
Savings depend on your rate reduction and balance. A 1.0% reduction on $320,000 saves approximately $213/month. With only $2,500–$3,500 in typical closing costs on an IRRRL, break-even is often 12–16 months — far faster than conventional refinancing.
How soon after my VA loan closed can I do an IRRRL?
You must have made at least 6 monthly payments on your current VA loan, and at least 210 days must have passed since the first payment due date. This "seasoning" requirement prevents loan churning and was introduced by VA guidelines (effective February 2018). Your lender will confirm the exact dates using your loan origination records. If you closed recently and don't yet meet the 210-day minimum, calculate when you become eligible and lock in a rate quote at that time.
Can I do a VA cash-out refinance if my current loan is conventional or FHA?
Yes. The VA cash-out refinance can replace any existing first mortgage — conventional, FHA, USDA, or another VA loan. This is one of the most underused VA benefits: veterans with conventional or FHA mortgages who have never used their VA entitlement can refinance into a VA loan through the cash-out program, eliminate PMI or FHA MIP, and potentially access a lower rate. The IRRRL, by contrast, is exclusively for borrowers who already have an existing VA loan.
Does refinancing affect my remaining VA loan entitlement?
Refinancing a VA loan does not restore or increase your entitlement — it simply replaces one VA loan with another. Your full entitlement remains tied to the property until the loan is paid off or the property is sold. However, if you have remaining bonus entitlement (the VA's $144,000+ secondary entitlement tier), you may be able to purchase a second property with a VA loan while your refinanced primary VA loan remains active — subject to income and credit qualification.
How to Use the VA Refinance Calculator
This calculator models both the VA IRRRL and cash-out refinance options, accounting for the VA funding fee — which varies by refinance type and disability exemption status. Here's how to use it for accurate results.
Step 1 — Enter your current loan balance and rate
Use the payoff balance from your mortgage statement. Your current VA loan rate is on your original loan note or servicer statement. If you locked in at 7%+ during 2022–2023, even a 0.75% reduction on an IRRRL produces a compelling 12–18 month break-even given the low funding fee.
Step 2 — Select your refinance type
Choose IRRRL (rate-and-term streamline) if your goal is a lower payment. Choose cash-out if you need equity access. The funding fee changes significantly: IRRRL is always 0.5%, while cash-out is 2.15% (first use) or 3.3% (subsequent use). The calculator applies the correct fee automatically and shows whether to finance it or pay it upfront.
Step 3 — Check the disability exemption box if applicable
Veterans receiving VA disability compensation at any rating level pay zero funding fee. This is the most common error on VA loan calculations — always verify your disability status before assuming you must pay the fee. Contact the VA or your lender to confirm your exemption status. A disability-exempt IRRRL can break even in as little as 5–7 months.
Step 4 — Enter other closing costs
The IRRRL's non-funding-fee closing costs are typically $1,500–$3,000 (title, recording, origination). The VA limits origination fees to 1% of the loan amount. No appraisal means one fewer expense. Enter the figure from your lender's Loan Estimate in this field — the calculator adds it to the funding fee for the total upfront cost and break-even calculation.
Maximizing the IRRRL: Key Rules
- No net tangible benefit barrier for most IRRRLs: Unlike FHA Streamline's 5% payment reduction requirement, the VA IRRRL primarily requires that the new rate be lower (for fixed-to-fixed) — making it easier to qualify with smaller rate reductions.
- Finance the funding fee to preserve cash: Rolling the 0.5% fee into the loan balance only adds a few dollars per month but avoids the need for upfront cash at closing — ideal if you want a near-zero out-of-pocket refinance.
- Consider a shorter term: IRRRL allows refinancing into a shorter loan term. If you have 22 years remaining at 7.5%, refinancing into a 20-year at 6.5% can lower both your payment and your total interest significantly. See our VA IRRRL closing costs guide for a full cost breakdown.
VA Funding Fee: Complete Rate Table
The VA funding fee is charged at closing and can be financed into the loan balance. It is the primary cost that distinguishes VA refinances from conventional refinancing — but veterans with service-connected disability compensation pay zero in all cases.
| Refinance Type | Disability Exempt | First Use | Subsequent Use |
|---|---|---|---|
| IRRRL (any use count) | 0% | 0.5% | 0.5% |
| Cash-Out — First Use | 0% | 2.15% | — |
| Cash-Out — Subsequent | 0% | — | 3.3% |
Dollar Impact by Loan Size
| Loan Balance | IRRRL Fee (0.5%) | Cash-Out First Use (2.15%) | Cash-Out Subsequent (3.3%) |
|---|---|---|---|
| $200,000 | $1,000 | $4,300 | $6,600 |
| $300,000 | $1,500 | $6,450 | $9,900 |
| $400,000 | $2,000 | $8,600 | $13,200 |
| $500,000 | $2,500 | $10,750 | $16,500 |
For a $400,000 cash-out refinance on a subsequent use, the 3.3% fee adds $13,200 to your closing costs — a figure that materially extends break-even. This is why disability-exempt veterans have a dramatically different break-even timeline than non-exempt veterans, and why the calculator asks for disability status separately.
Confirming Your Disability Exemption
If you receive any level of VA disability compensation, you are exempt from the funding fee. Your lender confirms exemption status by ordering a Certificate of Eligibility (COE) that reflects your rating. If your disability rating was awarded after your original VA loan closed, you may be eligible for a funding fee refund on the original loan — contact the VA directly to inquire.
VA IRRRL vs. VA Cash-Out Refinance: Side-by-Side
The two VA refinance products serve entirely different purposes and have very different cost structures, qualification requirements, and eligible outcomes. Use this comparison before choosing which type to model in the calculator.
| Feature | VA IRRRL | VA Cash-Out Refinance |
|---|---|---|
| Primary purpose | Reduce rate/payment | Access home equity as cash |
| Funding fee | 0.5% (0% if exempt) | 2.15% / 3.3% (0% if exempt) |
| Appraisal required | No (usually) | Yes |
| Income documentation | Minimal | Full underwriting |
| Existing loan requirement | Must already have VA loan | Can replace non-VA loan too |
| Maximum LTV | No limit (can exceed 100%) | 90% of appraised value |
| Rate must be lower? | Yes (fixed-to-fixed) | No |
| Closing timeline | 2–4 weeks (streamlined) | 4–6 weeks (full underwriting) |
Key Rule: IRRRL Can Only Replace a VA Loan
The IRRRL is exclusively for borrowers who already have an existing VA loan. If you started with a conventional or FHA loan, you cannot use the IRRRL. However, the VA cash-out refinance can replace a non-VA mortgage entirely — even if you've never used your VA benefit before — giving veterans with conventional mortgages access to the VA loan program for the first time at refinance.
Related Calculators & Guides
Compare VA and Conventional Offers Side by Side
Use the full RefinanceUSA calculator to enter your VA lender quote alongside any conventional offer — and see which one actually saves you more after all fees and funding costs.
Compare Offers