Wondering if all VA loan rates are created equal? Spoiler: they're not—and choosing the right one could save you thousands. In 2025, understanding how VA mortgage rates work isn’t just smart. It’s essential. This guide breaks down how to decode your rate, what influences it, and how to lock in the lowest number possible.

Key Takeaways

• VA loan rates are often lower than conventional mortgage rates, helping you save significantly over time.
  
• The VA does NOT have a minimum credit score requirement. Any number you're shown is a lender overlay. However, many lenders look for a 620+ score for better rate offers. VA Handbook 26-7, Chapter 4
  
• Federal Reserve policy influences VA rates. Tracking interest rate trends can help you decide when to lock.
  

Refinance options like the VA IRRRL (Interest Rate Reduction Refinance Loan) often offer streamlined paperwork and reduced rates.

How Often Do VA Mortgage Rates Change?

VA mortgage rates can shift daily, influenced by:

• Bond market movement
• Inflation trends
• Federal Reserve policy

Current VA Mortgage Rates (March 2025)

5 Key Factors That Affect Your VA Loan Interest Rate

1. Your Credit Score

The VA does not set a minimum credit score. Lenders often require 620 or higher, but manual underwriting is available for lower scores in some cases.

Citation: VA Handbook 26-7, Chapter 4

Tip: Improving your credit score can drop your interest rate by up to 0.50% or more.

Understand your eligibility first👉 Learn the full VA loan eligibility rules so you know you qualify.

Need a VA certificate? This guide on the VA Certificate of Eligibility walks you through it.

2. Federal Reserve Rate Policy

Mortgage rates—including VA—are influenced by the Federal Reserve’s interest rate decisions. When the Fed raises rates, mortgage rates tend to follow.

Keep an eye on the Federal Reserve’s rate announcements.

3. Loan Term Length

• 15-Year VA Loans: Lower rates, higher payments.
  
• 30-Year VA Loans: Higher rates, lower payments.
  

If you can afford higher monthly payments, a shorter loan term can save you tens of thousands in interest.

4. Loan Type (Purchase vs. Refinance)

• Purchase Loans: Standard VA rates.
  
• VA IRRRL (Streamline Refinance): Often lower rates with no appraisal or income verification required.
  

Reference: VA IRRRL Guidelines - VA.gov

Explore rate details deeper👉 Dive into VA loan pros, cons, and options.

Ready to refinance? Check out our VA Streamline Refinance walkthrough.

5. Your Lender

Not all VA lenders offer the same rate—even for the same borrower profile.

Always compare rates from 3–5 VA-approved lenders or work with a VA mortgage broker who can shop for you.

VA Loans vs. Conventional Loans: Which Saves You More?

Note: VA limits certain closing costs that can be charged to the borrower. Learn more in VA Pamphlet 26-7, Chapter 8.

How to Lock In the Lowest VA Mortgage Rate (Step-by-Step)

1. Check Today’s Rates

Use trusted sites like:

• Bankrate
  
• Freddie Mac PMMS
  
• [Lender marketplaces]
  

2. Get Pre-Qualified

Pre-qualification gives you an idea of what you can afford—and shows sellers you’re serious.

3. Work with a VA Mortgage Broker

Brokers can often find lower rates than direct lenders because they shop your profile across multiple sources.

Common VA Loan Rate Myths—Busted

Myth: All VA lenders offer the same rate.
Truth: Each lender sets its own rates, fees, and credit score overlays.

Myth: VA loans are only for first-time buyers.
Truth: You can use your VA entitlement multiple times—even after foreclosure.

Myth: You can’t refinance with a VA loan.
Truth: The VA IRRRL and cash-out refinance options are both available.

FAQs

How does my credit score impact my VA loan percentage?

Most lenders prefer 620+, but higher scores can qualify you for significantly better rates.

Can I refinance my VA loan for a better rate?

Yes. Use the VA IRRRL to drop your rate with fewer docs and no appraisal.

Do VA loans have better rates than conventional loans?

Usually, yes. Expect 0.25% to 0.50% savings.

Is it worth it to use a VA mortgage broker?

Definitely. They shop across lenders to get you the best rate.

Are there any hidden costs in VA loan rates?

VA limits fees, but always check lender-specific charges.

Your Next Steps

Want the lowest VA loan percentage possible?

• Compare rates online or with a VA mortgage broker.
  
• Understand your VA entitlement, credit profile, and eligibility.
  
• Consider Be My Neighbor Mortgage to explore AI-powered rate comparisons and commission-free real estate options with reAlpha.
  

Be My Neighbor Mortgage, LLC | NMLS #1743790

‍This is not a commitment to lend. All loans are subject to credit and underwriting approval. Rates and terms are subject to change based on market conditions and borrower qualifications.