Current VA Refinance Rates: Your Guide to Securing the Best Deals Today

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ByChristopher Boston
Edited byVictoria Copans

Updated: October 29, 2023

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A VA refinance loan is a great way for homeowners who are veterans or active service members to potentially lower their mortgage payments. If you're considering a VA refinance loan, it's important to stay updated on VA refinance rates so you can determine whether it’s the right time to apply to lock in favorable rates. Knowing current VA refinance rates can benefit your financial future — you’re more likely to make a well-informed decision, leading to more savings.

Exploring Today's VA Refinance Rates

Today’s VA refinance rates hover around 7% to 7.5%. However, these rates can shift, so homeowners should stay updated with current figures. Doing so will put you in a better position to act when rates drop, allowing you to lock in lower VA loan refinance rates and potentially save money every month.


How Market Conditions Influence VA Refinance Rates

VA mortgage refinance rates can rise or fall based on several market conditions and external factors. Let's dive into some key contributors:

  • Economic Indicators: When the economy is strong, and job growth is robust, more people have money to spend and borrow. It increases the demand for loans and can lead lenders to raise interest rates to maximize their profit.

  • Federal Reserve Actions: The Federal Reserve, or "the Fed," can adjust the federal funds rate, which influences short-term borrowing costs for banks. When this rate goes up, lenders often increase the interest rates they charge consumers, including those on VA refinance loans, to maintain their profit margins.

  • Global Events: Events like the 2008 financial crisis or the COVID-19 pandemic create major global uncertainties. During these times, investors may seek safer investments like U.S. bonds. A higher demand for these bonds can push down interest rates, including VA refinance rates.

  • Inflation: When prices of goods and services rise too fast (inflation), the purchasing power of money drops. Lenders might increase rates to maintain profit margins.

Staying informed about these influencers ensures you're not caught off guard. Whether you're planning to refinance or just keeping an eye out, understanding the why behind rate changes lets you make timely decisions.

What Is a VA Refinance Loan?

A VA refinance loan is a mortgage option designed for veterans and active service members to refinance their current home loans, helping them get better loan terms. VA refinance rates are usually lower than conventional loan rates, meaning you may have smaller monthly payments. These loans also don’t require you to have private mortgage insurance, which is typically needed for conventional refinances where the homeowner has less than 20% equity in the home.

However, VA refinance loans aren't just about better rates or terms. They're a nod of gratitude from the U.S. government, ensuring that those who have served our country have a genuine shot at affordable homeownership. It's a tailored experience, designed just for them.

Unlocking the Benefits of VA Refinance Loans

Securing a VA refinance loan can provide many opportunities for eligible homeowners. Not only can you get better loan terms, but you can also improve your financial stability. Let's break down some major benefits:

  • Lower Interest Rates: Lower VA refinance rates mean you can save a significant amount over the life of the loan.

  • Cash-Out Option: VA cash-out refinance lets you tap into your home's equity to get cash for whatever you need. You get financial flexibility without straining your budget.

  • Financial Stability: By lowering your monthly mortgage payment, you can balance your budget more effectively and free up funds for other needs or goals.

If you're a veteran or service member, VA refinance loans offer more than just the chance to lower your monthly mortgage payments — these loans provide an opportunity to improve your financial circumstances significantly if used correctly.

Understanding Types of VA Refinance Loans

Knowing the different VA refinance options allows qualified homeowners to select the one that best fits their needs. Two popular choices are the VA streamline (IRRRL) and the VA cash-out refinance. By understanding these, homeowners can make decisions that align with their financial goals, ensuring they get the most out of their refinancing journey.

Diving Into the VA Streamline (IRRRL)

The VA streamline refinance, or the Interest Rate Reduction Refinance Loan (IRRRL), stands out because of its convenience. It requires less paperwork and fewer verification steps compared to other refinance options. Coupled with often favorable current VA refinance rates, it's easy to see why many veterans lean towards this option. However, it's key to weigh the pros and cons before you jump in and ensure it's the best move for your situation. Let's take a closer look:


The VA streamline (IRRRL) is a standout refinance option for many veterans because it simplifies the refinancing process, offering potential savings and other benefits. However, as with any financial decision, it's vital to evaluate both the advantages and potential drawbacks to determine if it's the right fit for you.

Exploring the VA Cash-Out Refinance

The VA cash-out refinance is a solid choice for veterans and service members who want to tap into their home's equity. VA cash-out refinance rates are usually competitive, potentially leading to more affordable repayments. You can use the proceeds for anything from home improvements to debt consolidation, providing flexibility. However, to make an informed decision, it's important to dive into the pros and cons of this refinance option. Let's take a closer look:


The VA cash-out refinance can be an excellent choice if you want to borrow against your home equity or consolidate your debts. Despite the potential drawbacks, it’s worth checking if it aligns with your financial goals.

Who Should Consider a VA Refinance Loan

Understanding whether you're a good candidate for a VA refinance loan can save you time, effort and money. Let's dive into some hypothetical scenarios where a VA refinance loan might be a practical and beneficial choice.

Sergeant Tim's Thrifty Turnaround

Tim, a retired Army sergeant, has owned his home for a few years. His current mortgage interest rate is higher than the current VA refinance rates. By refinancing, Tim could secure a lower interest rate, reducing his monthly payments and saving money over time.

Navy Jane's Home Repair Rescue

Jane is a Navy veteran living in her first home, which needs some major repairs. She doesn’t have enough savings to cover these costs. A VA cash-out refinance could allow Jane to tap into her home's equity, providing the funds needed for the necessary home improvements.

Marine David's Debt Defeat

David, an active-duty Marine, has several high-interest credit card debts. He's finding it hard to keep up with the payments. By opting for a VA refinance loan, David could consolidate these debts into his mortgage, simplifying his finances and potentially lowering his overall interest rate.

Understanding your personal situation and keeping track of current VA refinance rates are proactive approaches that can help you decide if refinancing is right for you. There's no one-size-fits-all answer, but knowing the possible benefits can lead to better financial choices.

Securing a VA Refinance Loan: From Qualification to Costs

Securing a VA refinance loan involves knowing how to qualify and how to apply, as well as familiarizing yourself with any associated costs. A well-planned journey not only makes the process easier, but it could also save you money in the long run, putting you in a stronger financial position.

Eligibility for a VA Refinance Loan

For VA refinance loans, there are certain eligibility requirements that must be met. Here's a detailed breakdown:

Service Requirements: Veterans, active-duty service members and certain spouses can qualify. The specifics hinge on when and how long you served. The requirements are as follows:

  • You served 90 consecutive days of active service during wartime (181 days during peacetime)
  • You served for six years in the National Guard or Reserves. Alternatively, you also qualify if you served 90 days (at least 30 of them consecutively) under Title 32 orders.
  • You were married to a service member who passed while serving or because of a service-related disability.

Property Requirements: The property you're refinancing must be your primary residence.

Previous VA Loan: For a VA streamline refinance (IRRRL), you must be refinancing an existing VA loan. Otherwise, you can only avail of the VA cash-out refinance option.

Certificate of Eligibility (COE): This document shows lenders you meet the VA's service requirements.

Understanding your eligibility is the initial step towards reaping the benefits of a VA refinance loan and allows you to make informed decisions.

Navigating the VA Refinance Application Process

Knowing the ins and outs of the VA refinance application process can be empowering because it helps you transition from contemplating refinancing to successfully refinancing. Let's explore it step-by-step:

  1. Check Your Eligibility: Refer to the eligibility criteria from the previous section to ensure you meet the requirements.

  2. Collect Necessary Documents: You'll need a copy of your COE, income proof, bank statements, social security number and VA loan details, if applicable. Getting these ready early can expedite your application process.

  3. Comparison Shop: Different lenders offer different VA loan refinance rates. Take time to compare rates from several to ensure you get the best deal.

  4. Choose a Lender and Apply: Once you find a lender offering competitive rates, apply for the VA refinance loan. Your lender will guide you through their process.

  5. Undergo Underwriting: The lender will scrutinize your application, checking your credit, income and other details to determine your ability to repay the loan.

  6. Close the Loan: Once approved, you'll sign the final documents in a closing meeting.

Understanding the application process can help you navigate the refinancing terrain and secure VA loan refinance rates that best suit your situation.

Understanding the VA Funding Fee

The VA funding fee is a one-time payment to the Department of Veterans Affairs, helping to offset the loan program's cost to taxpayers. It's a small percentage of the loan amount — for first-time users, the rate is 2.15%. However, for any use after that, it increases to 3.3%.

The funding fee is based on the loan amount, not the home's purchase price. The rate remains consistent, regardless of your down payment. Even if your first VA-backed or VA direct home loan was only used to purchase a manufactured home, you'd still pay the first-time funding fee rate. Taking the funding fee into account helps make budgeting for a VA refinance loan more accurate.

How to Shop Around for the Best VA Refinance Rates

A favorable VA refinance rate can significantly lower your monthly payments, giving you more financial freedom. Here are some strategies to help you find the best VA refinance rates today:

  • Regularly Monitor VA Refinance Rates: Rates fluctuate due to market conditions. Regularly monitoring them can help you lock in a good rate when it becomes available.

  • Improve Your Credit Score: A higher credit score can lead to better refinance rates. Pay bills on time and maintain a low credit utilization ratio to improve your score.

  • Compare Lenders: Different lenders offer different rates. Shopping around can help you find the most competitive rates.

  • Consider a Shorter Loan Term: While this strategy increases monthly payments, it often comes with lower interest rates, potentially saving you money in the long term.

Securing the best rates is about staying informed and proactively managing your finances. Using these strategies can help you better position yourself to benefit from a VA refinance loan.

Frequently Asked Questions

Our FAQ section can offer quick answers to some common questions you might have about VA refinance loans. Whether you're a seasoned or new homeowner, these responses can help expand your understanding of this financial product.

VA loan rates are set by private lenders, not the government. Rates vary by lender and are influenced by market conditions and the borrower's creditworthiness.

For VA IRRRL and VA cash-out refinance loans, you must wait at least 210 days or make six on-time payments, whichever is longer, before you can refinance. It's important to consider the costs and benefits associated with refinancing before making a decision.

There are no limits on how often you can refinance a VA loan. However, refinancing too frequently can lead to higher costs, so it's best to weigh the pros and cons each time.

Yes, VA refinance loans do come with fees. The most notable is the VA funding fee, which is a percentage of the loan amount.

VA refinance loans are backed by the government, providing benefits like competitive rates and the possibility of no down payment. Conventional refinance loans are not government-backed and may have stricter eligibility requirements.

Potentially, yes. VA refinance loans often offer competitive rates, lower closing costs and the absence of mortgage insurance, which can make them more affordable than conventional refinance loans.

Yes, qualified homeowners can refinance up to 100% of their home's value with a VA cash-out refinance loan. This can be beneficial for those looking to leverage their home's equity.

About Christopher Boston

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Christopher (Croix) Boston was the Head of Loans content at MoneyGeek, with over five years of experience researching higher education, mortgage and personal loans.

Boston has a bachelor's degree from the Seattle Pacific University. They pride themselves in using their skills and experience to create quality content that helps people save and spend efficiently.