Current Mortgage Rates for VA Loans vs Conventional

Thirty-year VA mortgage rates ran between 0.27 and 0.38 percentage points below conventional rates on September 24, 2026, according to two daily rate surveys. On the same day, Freddie Mac's weekly benchmark for conventional loans rose to 7.03%. For an eligible veteran putting less than 20% down, the VA loan was the cheaper of the two. The choice comes down less to the rate than to how the one-time VA funding fee compares with years of conventional private mortgage insurance.

Freddie Mac's Primary Mortgage Market Survey put the 30-year fixed average at 7.03% for the week ending September 24, up from 6.95% a week earlier and 6.76% the week before that. A year ago it stood at 6.30%. The survey covers conventional loans only, so VA pricing has to be read from lender and market surveys.

Those surveys matter for anyone holding a VA quote this week. The rate gap is real but modest. The fee structure moves the total cost more than the rate does, and the spread between lenders on a single day is wider than the week's move in the benchmark.

Mortgage News Daily put the 30-year VA rate at 6.99% on September 24, up 0.10 point from the prior day and up 0.91 point from 6.08% a year earlier. The Mortgage Reports quoted 6.843% the same day. Veterans United's own rate sheet showed 6.625% (7.077% APR), assuming a 720 credit score. Borrowers below that mark should expect the credit score tiers to show up in the quote.

The loan carries no down payment requirement and no monthly mortgage insurance at any down payment, Veterans United says. In place of insurance, most borrowers pay a one-time funding fee. On the official VA funding fee page, the department explains that the fee depends on loan type, military category, first or subsequent use, and down payment.

For purchases in 2026, the fee is 2.15% for first use with less than 5% down, according to Veterans United and Military.com. It is 3.3% for subsequent use with less than 5% down. With 5% down it falls to 1.5%, and with 10% down to 1.25%, for first and subsequent use alike. On a $300,000 zero-down first purchase, the fee comes to $6,450, Military.com calculates.

Veterans receiving compensation for a service-connected disability do not pay the fee. Neither do Purple Heart recipients or eligible surviving spouses. The fee can be paid in cash at closing or rolled into the loan. According to VA News, it is deductible as an upfront mortgage insurance premium on Schedule A starting with the 2026 tax season.

The VA loan suits an eligible borrower with little cash for a down payment, and above all one who is exempt from the fee.

Freddie Mac's 7.03% is the industry reference for this loan. Daily surveys ran higher on September 24: 7.37% at Mortgage News Daily and 7.112% at The Mortgage Reports. Freddie Mac attributed the conditions to a labor market and an economy that continue to support housing demand.

"The housing market remains supported by a solid labor market and an economy that is growing at a healthy rate," the agency's chief economist commentary said.

A conventional loan carries no VA funding fee. Below 20% down, however, it requires private mortgage insurance that "can cost hundreds per month," Military.com says. Veterans United puts PMI at 0.58% to 1.85% of the loan amount a year, or $150 to $200 a month on a $388,000 home. It cites $200 or more a month as typical below 20% down.

The conventional loan suits a borrower with 20% to put down, or one who has used the VA benefit before and faces the 3.3% fee.

The first difference is the rate. Veterans United and The Mortgage Reports both say VA loans typically price below conventional and FHA loans. The Mortgage Reports estimates that a 0.25 point reduction saves about $40 a month on a $300,000 loan. At this week's spread, that is roughly $40 to $60 a month.

The second, and larger, is insurance against the fee. In VA Loan Network's worked comparison on a $350,000 home, the VA borrower financed a $7,525 fee and still paid about $69 a month less. That borrower also brought $15,000 to $17,000 less cash to closing and avoided about $9,900 in PMI over five years. The blog concludes that VA financing "typically costs less over any hold period longer than two to three years." Veterans United puts the monthly cost of a financed fee at usually $25 or less with no down payment.

The third is how widely lenders price the same loan. On September 24, VA quotes ran from Veterans United's 6.625% to Mortgage News Daily's 6.99%, a spread of 0.365 point. That is wider than the conventional benchmark's 0.08 point rise that week. On Bankrate's tool, the lowest advertised VA purchase rate was 5.875%, against a national average VA APR of 6.92%, though a rate and an APR are not the same measure. "Even two Veterans with the same VA benefit applying on the same day may receive different interest rates," Veterans United says. The assumptions behind a single number are laid out in what a VA quote assumes.

The case against the VA loan is narrower but real. Early in 2026, VA Loan Network recorded the two rates at 6.14% and 6.11%, conventional slightly lower, so the rate edge is not permanent. A repeat user with no down payment pays 3.3%, which lengthens the breakeven. On September 24, The Mortgage Reports quoted FHA at 6.839%, marginally below VA. And a borrower with 20% down pays no PMI on a conventional loan, which removes the VA loan's main advantage.

The sources do not set out when paying the fee in cash beats financing it. A financed fee accrues interest at the note rate for the life of the loan, so the question belongs on any quote sheet.

An eligible first-time VA user putting less than 20% down should take the VA loan. On this week's figures, it wins on rate, cash at closing and monthly cost, and it breaks even within two to three years in the published example. A veteran exempt from the funding fee has no reason to consider a conventional loan.

A borrower with 20% down, or a repeat user facing the 3.3% fee, should price both. That means asking one lender for a VA and a conventional quote on the same day, with the funding fee shown both paid in cash and financed.

Because lenders priced the same VA loan 0.365 point apart on September 24, the quote from a single lender is the least reliable number in the decision. At least two more VA-approved lenders should quote the same loan before a rate is locked.