Down Payment and Mortgage Insurance
VA loans require 0% down and never charge monthly mortgage insurance, while conventional loans need at least 3-5% down and typically charge PMI until you reach 20% equity — a significant ongoing cost VA borrowers avoid entirely.
Rates: VA Often Wins
VA loans carry a government guarantee that reduces lender risk, which is part of why the average 30-year VA rate (6.86%) tracks slightly below conventional (7.15%) as of September 2026.
The Funding Fee Trade-Off
VA's one-time funding fee (1.25%-3.3%, financeable into the loan) is the main cost conventional loans don't have — but it's typically far less over time than years of PMI payments on a conventional loan.
When Conventional Might Still Win
A borrower with 20%+ saved for a down payment and excellent credit might get a comparable or better rate conventionally without a funding fee at all — worth comparing both if you have substantial savings.
This page is for educational purposes and isn't personalized financial or tax advice. Figures, rates, and program details change frequently — confirm current terms directly with lenders, tax professionals, or the IRS before acting.