VA Loan vs. FHA Loan: Side-by-Side Rate and Fee Comparison for 2026 - LoanKey

 LoanKey Rating: 4.7 out of 5  |  Updated April 10, 2026  |  Reviewed by LoanKey Editorial Team

VA loans and FHA loans are both government-backed mortgages, but they serve different borrowers and carry very different long-term costs. VA loans are available exclusively to eligible US veterans, active-duty service members, and qualifying surviving spouses, and they require no down payment and no monthly mortgage insurance. FHA loans are open to any qualifying US borrower and require a minimum 3.5% down payment plus both upfront and annual mortgage insurance premiums. This comparison covers current rates, upfront costs, monthly costs, loan limits, credit requirements, and the total cost difference over 30 years.

Current Rates: VA vs FHA - April 2026

Loan Type	Average Rate (April 2026)	Source
30-year VA fixed	6.46%	Bankrate / Fortune data April 2026
30-year FHA fixed	6.13% to 6.37%	Fortune / Freddie Mac PMMS April 9, 2026
30-year conventional fixed	6.37%	Freddie Mac PMMS April 9, 2026

VA rates run slightly higher than FHA rates on a headline basis in April 2026. However, VA loans carry no monthly mortgage insurance premium, which means the total monthly payment on a VA loan is often lower than FHA despite the higher rate. The comparison requires looking beyond the rate alone.

VA Loan vs FHA Loan: Full Side-by-Side Comparison

Factor	VA Loan	FHA Loan
Who qualifies	US veterans, active-duty, National Guard/Reserve (with service requirements), eligible surviving spouses	Any qualifying US borrower or permanent resident; no military service required
Down payment	0% (no down payment required with full entitlement)	3.5% minimum (with 580 FICO); 10% minimum (with 500-579 FICO)
Minimum FICO score	No VA minimum; lenders typically require 620	500 (FHA minimum); 580 for 3.5% down
Monthly mortgage insurance	None	Annual MIP of 0.55% divided into monthly payments (life of loan with under 10% down)
Upfront insurance cost	VA funding fee: 1.25% to 3.3% of loan amount (can be financed)	Upfront MIP: 1.75% of loan amount (can be financed)
Funding fee exemptions	Yes: disabled veterans, Purple Heart recipients, surviving spouses of veterans who died in service	No exemptions for MIP
DTI ratio limit	41% preferred; exceptions approved with strong compensating factors	43% standard; up to 50% with compensating factors
Loan limits (2026)	No limit with full entitlement; conforming limit $806,500 applies with partial entitlement	$541,287 (standard); $1,249,125 (high-cost areas)
Property requirement	VA appraisal required; stricter property standards than conventional	FHA appraisal required; FHA minimum property standards apply
Property type	Primary residence only (1-4 units)	Primary residence only (1-4 units, FHA-approved condos, certain manufactured homes)
Closing costs	1% to 6% of loan amount; seller can cover up to 4% of home value	2% to 6% of loan amount; upfront MIP can be rolled into loan
MIP/PMI removal	No MIP; no removal needed	MIP lasts life of loan (under 10% down); removed after 11 years with 10%+ down
Streamline refinance	VA IRRRL: reduced documentation, no appraisal often required	FHA Streamline: reduced documentation, rate reduction or fixed-rate conversion
Can be used multiple times	Yes; entitlement can be restored after payoff	Yes; no lifetime limit

Total Cost Comparison on a $300,000 Home Purchase

Cost Item	VA Loan (0% down)	FHA Loan (3.5% down)
Down payment	$0	$10,500
Upfront VA funding fee / FHA MIP	$6,450 (2.15%, financed)	$5,074 (1.75%, financed)
Loan amount (after financing fee)	$306,450	$294,574 (approx.)
Monthly principal and interest at rate	Approx. $1,980 at 6.46%	Approx. $1,870 at 6.13%
Monthly MIP (FHA only)	$0	$136/month (0.55% annually)
Total monthly housing payment (P+I+MIP)	Approx. $1,980	Approx. $2,006
Total MIP paid over 30 years (FHA)	$0	Approx. $48,960
VA funding fee paid once	$6,450	Not applicable
Long-term cost advantage	VA saves approx. $42,000+ in insurance costs over 30 years	FHA costs more long-term due to permanent MIP

Calculations are illustrative based on April 2026 rates. Actual costs vary by lender, credit score, property taxes, homeowners insurance, and exact loan terms. Consult a licensed mortgage professional for a personalized estimate.

VA Loan Funding Fee - 2026 Rates

Borrower Type	Down Payment	First VA Loan	Subsequent VA Loan
Regular military / veteran	0%	2.15%	3.30%
Regular military / veteran	5% to 9.99%	1.50%	1.50%
Regular military / veteran	10% or more	1.25%	1.25%
National Guard / Reserves	0%	2.40%	3.30%
Exempt borrowers (disabled veterans, Purple Heart, surviving spouses)	Any	0% (exempt)	0% (exempt)

When a VA Loan Wins

VA loans produce the lower total cost in almost every scenario for eligible borrowers. Zero down payment reduces the cash needed at closing by $10,500 to $60,000 depending on purchase price. No monthly MIP saves $136 or more per month on a $300,000 loan for the full 30-year term. Eligible disabled veterans who qualify for a funding fee exemption pay no upfront fee at all, making the VA loan essentially free of government-related costs beyond the interest rate.

When an FHA Loan Wins

FHA is the stronger choice when the borrower does not qualify for a VA loan, when the borrower has a FICO score between 500 and 619 that falls below what VA lenders typically require, or when the FHA loan structure accommodates a borrower profile that VA underwriting would reject. FHA also allows certain co-borrower structures that VA purchase loans do not support, which can help buyers who need a co-signer to qualify.

The Mortgage Insurance Gap: The Key Number to Compare

The most significant long-term cost difference between VA and FHA loans is mortgage insurance. FHA MIP at 0.55% of the loan amount per year adds $136 per month on a $300,000 loan and $1,631 per year. Over 30 years with a 3.5% down payment and no refinancing, the total FHA MIP burden exceeds $48,000. VA loans carry no equivalent ongoing charge. For eligible veterans, this is the most important number in the comparison.

LoanKey.org is an independent comparison site. Rate data sourced from Freddie Mac PMMS, Fortune, and Bankrate as of April 2026. VA loan funding fee data from the US Department of Veterans Affairs. This is not financial advice. Consult a HUD-approved lender or VA-approved lender for personalized rates.