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Updated March 2026 · Real rate data

VA Loan vs FHA Loan
2026 Comparison

VA loans offer $0 down and no mortgage insurance. FHA loans require 3.5% down and charge MIP for the life of the loan. On a $400,000 home, VA saves you $283/month and $101,000+ over 30 years. Here is the complete side-by-side breakdown.

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Updated March 2026 · Real rate data

VA vs Conventional
Which Saves More?

VA loans save veterans $175,000+ over 30 years compared to conventional loans. $0 down payment, no PMI ever, and rates 0.375% lower. Here is the complete comparison with real numbers.

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$0
VA saves vs Conv (5% dn)
$0
Lifetime savings
$0
VA down payment
$0
VA mortgage insurance
SIDE BY SIDE

VA vs Conventional: Complete Comparison

Every major difference on a $400,000 home purchase. March 2026 rates.

Feature
VA Loan
Conventional
Down Payment
$0 (0%)
$20,000 (5%)
Mortgage Insurance
$0/mo — never
$183/mo until 20% equity (~7 yrs)
Interest Rate (30yr)
5.750%
6.125%
Monthly P&I
$2,334
$2,311 (on $380K)
Total Monthly (w/ PMI)
$2,334
$2,494 (first 7 years)
Credit Score Minimum
580+ (lender varies)
620+ (680+ for best rates)
Loan Limit (2026)
No limit (full entitlement)
$832,750 (conforming)
Upfront Fee
2.15% funding fee (tax-deductible 2026)
None (but PMI monthly)
30-Year Total Cost
~$840,000
~$1,015,000
TOTAL COST

30-Year Total Cost: VA Saves $175K+

VA Loan
$0
$0 down · $0 PMI · 5.750%
Monthly: $2,334 P&I
Lowest total cost
Conventional (5% down)
$0
$20K down · PMI 7 yrs · 6.125%
Monthly: $2,494 (w/ PMI)
+$175K more
Conventional (20% down)
$0
$80K down · $0 PMI · 6.125%
Monthly: $1,944 P&I
+$78K more + $80K tied up
Learn more about conventional loans →
PMI TIMELINE

Conventional PMI: $183/mo for ~7 Years

Conventional loans with less than 20% down require PMI. It takes about 7 years to build 20% equity and remove it. VA loans never charge PMI at all.

Conventional PMI Timeline ($400K, 5% down)
Year 0 Year 3 Year 7 Year 15 Year 30 Conv: $183/mo PMI PMI drops off VA: $0 PMI forever

Conventional PMI on $380K loan at ~0.58% annual. Removed once borrower reaches 20% equity (~year 7 with normal appreciation).

Conv PMI total (7 years)
$0

$183/mo × 84 months

VA mortgage insurance
$0

$0 today. $0 tomorrow. $0 forever.

WHEN CONVENTIONAL WINS

When Conventional Might Be Better

VA is better in most scenarios, but there are a few cases where conventional could make sense:

Investment Property

VA loans require owner-occupancy. If you are buying strictly as a rental or investment property, conventional is your option (though you could buy a 2-4 unit with VA and rent the extra units).

Disabled Vet with 20% Down

Veterans with 10%+ disability are exempt from the VA funding fee. If you also have 20% down, conventional has no PMI and no funding fee either. In this narrow case, the rate difference is the deciding factor.

Second Home / Vacation

VA requires primary residence occupancy. For a second home or vacation property, conventional is required. However, you can keep a VA loan on your primary and get conventional for the second.

Preserving VA Entitlement

Some veterans choose conventional for a lower-priced home to preserve their VA entitlement for a larger future purchase. This is a strategic choice worth discussing with your loan officer.

FAQ

VA vs Conventional Questions

For eligible veterans, VA loans are better in almost every scenario. VA offers $0 down payment (vs 3-20%), $0 mortgage insurance (vs $183/mo PMI on conventional with less than 20% down), lower interest rates (5.750% vs 6.125%), and no loan limit with full entitlement. Over 30 years, VA saves approximately $175,000+ compared to conventional with 5% down.
Yes. If you currently have a conventional mortgage and are VA-eligible, you can refinance into a VA loan using a VA Cash-Out refinance. This can lower your rate, eliminate PMI (if you have less than 20% equity), and even let you take cash out of your equity. Many veterans save $200-500/month by switching from conventional to VA.
VA rates are lower because the VA guarantees up to 25% of the loan amount, significantly reducing lender risk. VA loans also have the lowest foreclosure rate of any loan type. This government backing lets lenders offer rates 0.25-0.50% below conventional. As of March 2026, VA 30-year fixed is 5.750% vs conventional at 6.125%.
No. The VA funding fee (2.15% first use) is a one-time charge that can be financed. Starting in 2026, it is also tax-deductible. Even with the funding fee, VA loans cost dramatically less overall because of the lower rate and $0 PMI. The fee adds about $50/mo to a $400K loan when financed, but you save $160+/mo from the lower rate and no PMI. About 1 in 3 VA borrowers are fully exempt from the fee due to VA disability.
Yes. You can have a VA loan on your primary residence and a conventional loan on an investment or second property. You can also have two VA loans simultaneously if you have remaining entitlement. Some veterans strategically use conventional for smaller purchases to preserve VA entitlement for a larger home.
VA loans are more accessible. While the VA sets no minimum credit score, most lenders require 580-620. Conventional loans typically require 620 minimum, with 680+ needed for the best rates and lowest PMI. VA loans also have the lowest denial rate of any major loan type, making them easier to qualify for overall.
RELATED

Related Resources

VA Purchase LoansVA EligibilityClosing Costs ComparisonVA vs FHACompare Payments
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EXPLORE

Related Resources

VA vs FHAVA PurchaseVA Rates TodayVA EligibilityVA Loan Guide
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VA Loan Resources

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