Who has the lowest VA mortgage rates?

VA loans typically have ultra–low rates compared to other types of mortgages. So do you still need to shop for the lowest VA mortgage rates? Absolutely!

Comparison shopping for your mortgage can save you many thousands of dollars, according to one federal regulator. And nowadays, getting quotes from multiple lenders can be quick and easy.

If you want to find the lowest VA mortgage rate and save on your home loan, here’s what to do.

Get started shopping for VA mortgage rates (Jan 19th, 2022)


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Average rates vs. your rate

It’s true that VA mortgage rates are lower than most other loan types on average. But average rates are only useful for ‘average’ borrowers – and that may not be you.

For example, your credit score might be higher or lower than most. Or you could owe more or less than average in existing debts. Or perhaps you want to make a down payment, even though you don’t have to.

Each of those (and other things) can impact your loan options and mortgage rate. And you’ll find your best mortgage deal with a lender that’s comfortable working with a borrower like you.

6 Tips to find the lowest VA mortgage rates

1. Shop around

As we’ve already said, shopping around between lenders can be your best route to the lowest VA mortgage rates possible. But how many lenders should you approach?

Freddie Mac (a huge name in the mortgage industry) did some research to find out. And it reported:

“Our research indicates that borrowers could save an average of $1,500 over the life of the loan by getting one additional rate quote and an average of about $3,000 for five quotes.” –Freddie Mac

Those averages were for conventional loans. And when it comes to government–backed VA mortgages, there may be a smaller difference between lenders. But still, getting quotes from just three to five lenders could save you a substantial amount of money over the life of your loan.

Not sure how to compare mortgage quotes (a.k.a. Loan Estimates)? Learn all you need to know in: How to shop for mortgage rates and compare quotes

2. Don’t automatically stick with a familiar lender

You might be refinancing an existing VA loan or borrowing again to buy a different home. And you may be very happy with your existing lender. But that doesn’t mean you should skip comparison shopping, for two reasons:

  1. Your finances may have changed – Suppose things have gotten easier since you bought your home and your credit score is higher now. Or times have been tough and it’s fallen. A different score (or any other factor that makes up your borrower profile) may mean that your existing lender is no longer the best one for you
  2. Your lender may have changed – Most lenders go through phases of being more or less competitive. Sometimes, the mortgage market’s changed. Or its own business model has. Lots of things can mean that the lender who was best last time around no longer is

Of course, you should still ask your existing lender for a quote. But only stick with it if it’s offering the best deal compared to your other quotes.

Get started shopping for VA mortgage rates (Jan 19th, 2022)

3. Beware recommendations

You may have a pal with a VA loan who thinks their lender is the best possible. By all means, ask that lender for a quote. But ask plenty of others, too.

As we said above, your personal finances have a major impact on your mortgage rate. And those may be very different from the person recommending a lender to you. So the company that offered their best deal may not be your best.

4. Negotiate

A quote is just an estimate. It’s not carved in stone.

You can always call lenders to try to reduce your rate or loan costs. And don’t hesitate to make lenders compete with one another: “I’d love to go with your company but lender x has sent me a loan estimate with a lower rate. Please would you match it?”

Or maybe the rates are the same but one has higher loan costs. You may be able to get your preferred lender to reduce its fees.

According to Jon Meyer, The Mortgage Reports loan expert and licensed MLO, closing costs are “the best thing to negotiate on, while rates can be a little more difficult.”

Again, negotiate the best deal using other lenders’ quotes as leverage. And keep using that leverage until you’re sure you can’t squeeze out any more savings.

6. Get your finances in shape

You’ll likely get a better deal than otherwise if you work on your finances in the months before you apply for a mortgage or refinance. You can make yourself a more attractive borrower and earn a lower rate by:

  1. Boosting your credit score – Read How to raise your credit score fast
  2. Reducing your existing debts – Do all you can to reduce your debt burden, especially credit or store card balances. And don’t take on any new debts or credit cards prior to closing your home loan
  3. Increasing your savings – Lenders like borrowers who have emergency funds
  4. Sticking with your current job – A job change before closing can impact your eligibility and put your mortgage approval in jeopardy

It’s unlikely you can do all those at the same time. But sometimes it’s amazing how small improvements can lower the mortgage rate you have to pay.

What to look for in a VA lender

Obviously, the first thing you’re going to look for is the best overall deal. And that means a low mortgage rate and low closing costs.

How you balance those will depend on your circumstances.

If you’re short on cash, you may be willing to pay a slightly higher mortgage rate and keep your closing costs low. But, if you have plenty of money, you may not care about closing costs and can concentrate on the long–term savings a lower rate should bring.

Do recognize that some lenders are stricter than others when it comes to lending criteria. We’ve found VA mortgage lenders requiring credit scores as low as 550 and higher than 640. So, if your score’s an issue, exclude ones with high credit thresholds.

But it’s not all about the dollars and cents. Because you also want a lender that’s efficient and trustworthy.

After all, there’s no point getting a low rate if you end up losing your dream home because the lender was too slow and incompetent to deliver your loan on time.

So check out the lenders on your short list to see the average scores their customers award them on online consumer review websites. You can search for them on the Better Business Bureau’s website to find their BBB rating. Finally, do another search on the Consumer Financial Protection Bureau’s (CFPB’s) consumer complaint database.

One warning. Don’t read too much into individual complaints. Every organization with huge numbers of customers inevitably alienates some. So focus on the numerical overview rather than occasional bad experiences.

VA mortgage rates FAQ

What lender has the lowest VA mortgage rates? 

That depends on your situation. The VA doesn’t regulate mortgage rates; rather, they’re set by individual lenders. And each one has its own rate–setting formula. So you can only find the cheapest lender for you by shopping around and getting multiple rate quotes.

Are VA interest rates lower than conventional ones?

Yes. For years, Ellie Mae (now ICE Mortgage Technology) has put out a monthly Origination Insight Report showing VA loans to have consistently and appreciably lower rates than conventional mortgages and FHA loans. That’s one reason VA mortgages are usually the best choice for eligible veterans and service members.

Are there closing costs on a VA loan? 

Yes. VA closing costs include lender fees, appraisal fees, discount points, processing fees, and various fees for third–party services. There’s also a one–time VA funding fee that’s technically due at closing, but most borrowers roll it into the loan amount so they don’t have to pay upfront.

How do I shop for VA mortgage rates? 

All you have to do is request quotes from several lenders. You can find lenders with low advertised rates online, ask friends for recommendations, and ask your bank, credit union, and/or existing mortgage lender (if you have one). The more you get, the better your chance of finding your lowest rate. It needn’t take long. And the hours you spend could be the best–paid ones of your life.

Are you ready to start applying for a VA loan?

Experts recommend getting there to five rate quotes at a minimum to find the best deal. And if you can get more, it only improves your odds.

You can get started right here.

Show me today’s rates (Jan 19th, 2022)

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.



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