VA Funding Fee vs PMI Calculator 2026
The VA funding fee runs 1.25-3.3% of the loan amount (one-time, financed) and is waived for veterans with service-connected disability. Conventional PMI runs 0.3-1.5% annually until you reach 20-22% equity. This calculator compares the 7-year cost so you can pick the cheaper path.
| Loan amount | — |
| Down payment | — |
| VA funding fee rate (2026) | — |
| VA funding fee — one-time | — |
| Conventional PMI rate (est.) | — |
| Monthly PMI | — |
| Months PMI required (to 80% LTV) | — |
| Total VA cost | — |
| Total PMI cost over period | — |
| Savings with cheaper option | — |
The VA funding fee is a one-time charge (financed into the loan) that veterans pay in lieu of Private Mortgage Insurance (PMI) on a conventional loan. In 2026, the fee is 1.25-3.3% of the loan depending on down payment and prior VA usage — and is fully WAIVED for veterans with a 10%+ service-connected disability rating. Last updated May 2026.
2026 VA Funding Fee Schedule
First-time use: 2.15% with 0% down, 1.5% with 5% down, 1.25% with 10%+ down. Subsequent use: 3.3% with 0% down (down from 3.6% pre-2023), 1.5% with 5% down, 1.25% with 10%+ down. The fee is financed into the loan, so you don't pay it at closing — it's amortized over the life of the loan. Source: U.S. Department of Veterans Affairs, VA Pamphlet 26-7.
Conventional PMI Cost in 2026
Private Mortgage Insurance on conventional loans ranges from 0.30% to 1.50% annually, depending on credit score, LTV, and loan type. At 5% down with 720 credit, expect roughly 0.55-0.75% annual PMI on the loan amount. PMI continues until you reach 78% LTV (automatic termination by law per the Homeowners Protection Act, HPA) or 80% LTV (you can request cancellation). On a $400K loan with 5% down, that's roughly $200-$250/month for 5-8 years. Source: Fannie Mae PMI Rates.
VA Disability Exemption Saves Thousands
Veterans receiving (or eligible for) VA compensation for service-connected disability — even at 10% — pay ZERO funding fee. On a $400,000 loan, that's a $5,000-$13,200 savings. Surviving spouses of veterans who died in service or from service-connected causes also qualify for exemption. Verify your status through the VA Certificate of Eligibility (COE) — your lender pulls this automatically with your authorization.
When Conventional with PMI Beats VA
VA is almost always cheaper for veterans without disability exemption, BUT consider conventional if: (1) you have 20%+ down — no PMI at all, beats VA funding fee; (2) you have excellent credit (760+) and plan to refinance within 3 years — conventional PMI cancels at 80% LTV faster than amortizing a financed VA fee; (3) you're buying a non-primary property — VA loans are owner-occupied only; or (4) loan exceeds VA county loan limit and you don't have second-tier entitlement.