VA Loan Rates for November 2022

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A VA loan can help qualified Veterans, military members, and their families gain access to homeownership in ways conventional loans cannot.

For buyers taking advantage of their VA loan benefit, here’s what you need to know about the current VA mortgage rate trends.

Closing the Gap

The VA loan program has been shown to reduce inequalities in the housing market by offering service members an alternative path to homeownership where they might otherwise be shut out. In 2019, the spread between homeownership rates of Black and White veterans was 19.6 percentage points, according to a study by the mortgage lender Veterans United Home Loans. In the non-military population, that gap was nearly 30 percentage points.

The Latest Mortgage Rate & Housing News

What’s Going On With Rising Mortgage Rates?

Mortgage rates have been on the rise since the start of the year and haven’t stopped yet. A big reason behind the increase is that inflation has remained at its highest level in 40 years. The Consumer Price Index was up 8.2% year-over-year in September – lower than August but still well above what markets and the Federal Reserve are comfortable with.

The Fed’s approach to high inflation has been to raise its benchmark short-term interest rate, a strategy that aims to make borrowing more expensive and encourage saving, driving down demand for goods and services and reducing prices. The Fed last raised its federal funds rate in September, and is expected to do so again in November.

The economic situation has mortgage rates jumping up and down on a daily basis.

“The market just can’t really decide which way it wants to go in terms of the direction of rates,” says Melissa Cohn, regional vice president of William Raveis Mortgage in New York.

Don’t expect mortgage rates to plummet until economic conditions change, experts say.

“Until we get some sustained evidence that inflation is beginning to recede, the upward pressure on mortgage rates will remain,” Odeta Kushi, deputy chief economist at First American Financial Corporation, told us.

What Can Homebuyers Do About Rising Mortgage Rates?

The current housing environment is particularly tough for first-time homebuyers, but it might still make sense to buy. “It’s always a good time to buy a home, if that’s what is important to you. It’s just about doing your research and making good informed decisions,” Eileen Derks, head of mortgage at Laurel Road, told us

Rising mortgage rates have made affordability increasingly difficult for homebuyers, despite some drops in home prices. If you’re considering a mortgage, experts say it’s more important than ever to shop around with different lenders, as rates can vary dramatically from day to day and from lender to lender.

“Until you’re ready to lock, you need to keep your eye on more than one ball,” Cohn says.

What’s Happening With Home Prices?   

The big surge in mortgage rates has started to bring down home prices. The median existing home sold for $389,500, up 7.7% from a year earlier but down from figures of more than $400,000 seen earlier in the summer, according to the National Association of Realtors (NAR).

How quickly the housing market is turning around depends on where you are. In some cities, prices are seeing month-to-month price drops of nearly 3%, while others are still riding a wave of increases. “It’s very market-dependent at the moment,” says Robert Heck, vice president of mortgage at Morty, an online mortgage broker. 

Home sales figures are dropping significantly – down 0.4% from July to August and nearly 20% from August 2021 – in part because homeowners who have favorable mortgage rates are unwilling to sell and get a loan at a much higher rate. 

Homebuyers facing a difficult environment can find creative ways to save money on a home purchase. One is to consider an adjustable-rate mortgage, Cohn says. They tend to offer periods of several years with a fixed rate – and it should be significantly lower than a 30-year fixed rate would be – before the rate starts to adjust with the market. That should give you a few years to refinance if the market improves.

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What Are Today’s VA Mortgage Rates?

On Friday, November 25, 2022 according to Bankrate’s latest survey of the nation’s largest mortgage lenders, the average 30-year VA mortgage rate is 6.170% with an APR of 6.300%. The average 30-year VA mortgage refinance rate is 6.100% with an APR of 6.320%.

Current VA Mortgage Rates

ProductInterest RateAPR
30-Year Fixed Rate6.750%6.770%
30-Year FHA Rate6.030%6.920%
30-Year VA Rate6.100%6.320%
30-Year Fixed Jumbo Rate6.770%6.780%
20-Year Fixed Rate6.570%6.590%
15-Year Fixed Rate6.180%6.210%
15-Year Fixed Jumbo Rate6.180%6.210%
10-Year Fixed Rate6.240%6.260%
5/1 ARM Rate5.310%7.290%
5/1 ARM Jumbo Rate5.220%7.050%
7/1 ARM Rate6.080%6.790%
7/1 ARM Jumbo Rate6.330%6.520%
10/1 ARM Rate6.470%6.730%
ProductInterest RateAPR
30-Year Fixed Rate6.770%6.780%
30-Year FHA Rate6.110%6.990%
30-Year VA Rate6.170%6.300%
30-Year Fixed Jumbo Rate6.760%6.780%
20-Year Fixed Rate6.590%6.610%
15-Year Fixed Rate6.160%6.190%
15-Year Fixed Jumbo Rate6.160%6.180%
10-Year Fixed Rate6.250%6.270%
5/1 ARM Rate5.500%7.490%
5/1 ARM Jumbo Rate5.290%7.460%
7/1 ARM Rate6.100%6.890%
7/1 ARM Jumbo Rate6.340%6.550%
10/1 ARM Rate6.410%6.810%

Rates as of Friday, November 25, 2022

ABOUT THESE RATES

These rate averages are based on weekday mortgage rate information provided by national lenders to Bankrate.com, which like NextAdvisor is owned by Red Ventures. These averages provide borrowers a broad view of average rates that can inform borrowers when comparing lender offers. We feature both the interest rate and the annual percentage rate (APR), which includes additional lender fees, so you can get a better idea of the overall cost of the loan. The actual interest rate you can qualify for may be different from the average rates quoted in our rate table. But these rates are useful for giving you a benchmark to use when comparing loan offers by giving you a sense of how the type of mortgage and the length of the repayment term impacts your interest rate and APR.

VA Loan: Frequently Asked Questions (FAQ)

What is a VA loan?

A VA loan is a mortgage backed by the U.S. Department of Veterans Affairs. A VA loan has several advantages over other types of mortgages, including competitive interest rates, no private mortgage insurance (PMI) requirement, and the option for financing a home with no down payment

VA purchase loans are only available to borrowers with qualifying military service who are purchasing a primary residence. In addition to purchase loans, there are also VA-backed loans for refinancing your existing mortgage and direct VA loans for Native American Veterans.

Who qualifies for a VA loan?

The main requirement to qualify for a VA loan is military service or you must be a surviving spouse of a veteran. The amount of time you need to serve in the military to qualify varies depending on when you served. But, if you’re on active duty, you only need 90 continuous days before you’re eligible for a VA loan.

Like other government-secured loans, a VA mortgage is typically easier to qualify for than a conventional loan. While each lender has specific credit score requirements, the VA doesn’t have an official minimum credit score requirement. If you have a blemish on your credit report, like a foreclosure or bankruptcy, a VA loan can be easier to qualify for. You may be eligible for a new VA mortgage in as little as one or two years after a bankruptcy, depending on the type of bankruptcy. With a conventional mortgage, the waiting period is at least twice as long.

How do I compare VA loans and other mortgage rates?

There are a few key differences between VA loans and other mortgages. Unlike most mortgages, VA loans don’t require private mortgage insurance even if the borrower has less than 20% equity in the property. PMI can cost anywhere from 0.5% to over 2% annually, so avoiding PMI can be a significant savings.

VA loans also have no minimum down payment requirement, so you can finance 100% of the home purchase. The minimum down payment for an Federal Housing Administration (FHA) loan is 3.5% and for conventional mortgages it can be as little as 3%, although it can be much higher.

However, in lieu of PMI or a down payment, VA loans have an upfront funding fee which is typically 1.4%-3.6% of the loan amount. The VA mortgage funding fee can be rolled into your loan and wounded or disabled service members may qualify for a funding fee waiver.

What is the difference between a VA loan vs. 30-year fixed mortgage?

Compared to a conventional 30-year fixed mortgage, a 30-year VA loan has some distinct advantages and disadvantages.

Aside from what we already covered (no down payment, no PMI, etc.) a VA loan is typically easier to qualify for than a conventional loan, assuming you meet the military service requirements. So a borrower with a weaker credit history may have a better chance of qualifying for a VA loan or getting a better mortgage rate.

However, VA loans have limitations. They can’t be used for second homes or investment properties. Not only that, but the upfront funding fee increases each time a veteran takes advantage of the VA mortgage benefit. For example, if your down payment is less than 5%, the funding fee jumps from 2.3% to 3.6% after the first use of your VA loan benefit.

What is the difference between a VA purchase rate Vs. a VA refinance rate?

Typically, VA purchase rates will be lower than VA refinance rates. However, there are a few factors that play into what rate you can qualify for.

The main things to pay attention to are your credit score and loan-to-value ratio (LTV). But the type of mortgage is also important. You can take equity out of your home with a VA cash-out refinance, but cash-out refinance loans often have higher interest rates than standard rate-and-term refinancing.

The length of your repayment term will also move your rate in one direction or another. Longer-term loans have higher rates and shorter-term loans have lower rates. So 15-year mortgages have lower interest rates than 30-year loans, all else being equal.

What are VA loan fees?

For the most part, you’ll pay the same types of closing costs on a VA loan as what you would for other types of mortgages. But there are some differences, there are certain fees that are allowed, and others that aren’t. The biggest extra fee you’ll need to pay is the VA funding fee, which is a one-time upfront payment of 1.4% to 3.6% of the loan amount for most types of VA mortgages for home purchases. 

In addition, lenders are allowed, but not required, to add a lender fee of up to 1% of the loan balance. But, under specific circumstances, you may qualify for a VA Funding Fee waiver, and VA loans never charge a mortgage insurance premium. The VA also prohibits lenders from charging certain specific fees on its loans, such as attorney fees, prepayment penalties, or broker commissions. And, if you’re taking advantage of a VA Interest Rate Reduction Refinance Loan (IRRRL), then you may be able to skip the appraisal and save on those fees.

When should I consider a VA Loan?

If you meet the military service requirement to qualify for a VA loan, it can be an excellent option. But depending on your personal financial situation you may find that even if you’re eligible for a VA loan, it’s not the best deal for you.

What are the pros to a VA loan?

Compared to conventional home loans, a VA loan typically has less strict qualification standards. So you’re likely to have an easier time qualifying with a lower credit score or higher debt-to-income ratio compared to other types of mortgages.

VA loans also usually have lower interest rates than comparable conventional loans and never require PMI. A VA mortgage may require you to pay less out of pocket to purchase a home. You can finance 100% of the home’s purchase price and the VA limits certain closing costs and may be able to roll the VA funding fee into the loan.

What are the cons to a VA loan?

The biggest extra expense associated with a VA loan is the initial funding fee. If you don’t qualify for a funding fee waiver, it can be a big consideration. The funding fee is based on the amount of your down payment and whether or not you’ve taken out a VA loan before. While the funding fee can be as little as 0.5% for certain VA refinance loans, it caps out at 3.6% for repeat borrowers who have a down payment of less than 5%.

If you have the ability to put 20% down on your home purchase with a conventional loan, you can waive the PMI requirement and avoid the funding fee at the same time. This negates some of the benefit of a VA loan and because you’re borrowing less you’ll have smaller monthly payments and pay less in interest.

VA loans also have more rigorous appraisal standards than conventional mortgages. In a hot real estate market, sellers are likely to have multiple offers to choose from. So the extra hurdle of having to navigate a VA mortgage appraisal could be a deal breaker because you can’t waive the appraisal contingency on a VA loan. 

Who sets VA loan rates?

There is no single entity that sets VA loan interest rates. Instead, individual lenders offer you certain rates based on broader market conditions, your personal financial situation. 

The mortgage rates you’re eligible for will vary depending on:

How each individual lender evaluates your finances varies, so you want to shop around. By comparing offers from multiple lenders, you can find not only the loan with the best interest rate, but also with the lowest fees.

How do I find a personalized VA loan rate?

You have to compare mortgage lenders to find the best personalized VA loan rates.

The interest rates you can qualify for are based on your credit score, income, and other factors. However, because the VA guarantees the loan you can expect a VA mortgage rate to be lower than other mortgages with similar terms. But you’ll want to pay attention to the annual percentage rate (APR), which also takes some of the upfront fees into account.

 

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