VA Interest Rates: What You Need to Know
Mortgage Broker
Jason Turner Mortgage Broker
Published on April 14, 2023

VA Interest Rates: What You Need to Know

If you’re a veteran or active-duty service member looking to buy a home, you may be considering a VA loan. VA loans offer many benefits, including competitive interest rates. In this blog post, we’ll explore VA interest rates, how they work, and what you need to know before applying for a VA loan.

What are VA Interest Rates?

VA interest rates are the rates at which lenders offer loans to veterans and active-duty service members. These rates are typically lower than conventional mortgage rates and can vary based on market conditions, lender policies, and borrower qualifications.

VA interest rates are not set by the Department of Veterans Affairs (VA). Instead, private lenders set their own interest rates based on a variety of factors, including the borrower’s credit score, debt-to-income ratio, loan amount, and loan term.

How Do VA Interest Rates Work?

VA interest rates work in much the same way as conventional mortgage rates. Lenders use the borrower’s credit score and other financial factors to determine the interest rate they offer. A higher credit score and lower debt-to-income ratio can lead to a lower interest rate.

VA loans also offer the option of a fixed-rate or adjustable-rate mortgage (ARM). With a fixed-rate mortgage, the interest rate stays the same throughout the life of the loan, while an ARM has an initial fixed-rate period, followed by a period where the rate can adjust up or down based on market conditions.

What Factors Affect VA Interest Rates?

Several factors can affect VA interest rates, including:

  • Credit score: A higher credit score generally leads to a lower interest rate.
  • Debt-to-income ratio: A lower debt-to-income ratio can lead to a lower interest rate.
  • Loan amount: Larger loan amounts may have higher interest rates.
  • Loan term: Longer loan terms may have higher interest rates.
  • Market conditions: Interest rates can fluctuate based on market conditions, such as the economy and inflation.

It’s important to shop around for lenders and compare interest rates to find the best deal. VA loans offer the option to “shop around” without negatively affecting your credit score, as long as you complete all applications within a 14-day period.

How Can You Get the Best VA Interest Rates?

To get the best VA interest rates, you can take the following steps:

  • Improve your credit score: Pay bills on time, pay down debt, and dispute any errors on your credit report.
  • Reduce your debt-to-income ratio: Pay down debt and avoid taking on new debt.
  • Save for a larger down payment: A larger down payment can help lower your interest rate.
  • Compare lenders: Shop around and compare interest rates from different lenders.
  • Consider a shorter loan term: A shorter loan term may have a lower interest rate.


VA loans offer competitive interest rates for veterans and active-duty service members. While VA interest rates are set by private lenders, borrowers can take steps to qualify for the best rates, including improving their credit score, reducing their debt-to-income ratio, and shopping around for lenders. By doing so, veterans and active-duty service members can take advantage of the benefits of VA loans and save money over the life of their loan.

Mortgage Broker
Jason Turner Mortgage Broker
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(410) 474-7153