VA Closing Costs Calculator

Cash to Close, Funding Fee, and Quote Comparison

VA Closing Costs Calculator: Estimate Cash to Close and Compare Quotes

Written by: Matt SchwartzNMLS#151017Written by: Matt Schwartz (NMLS 151017)

Reviewed by: Kenneth Schwartz, Loan OfficerNMLS#1001095Reviewed: Kenneth Schwartz (NMLS 1001095)

Updated on September 25, 2026

Primary sources:
VA Lender's Handbook Ch. 8

VA Funding Fee & Closing Costs

CFPB Loan Estimate Explainer

This calculator takes the numbers from a real quote or Loan Estimate, models the funding fee, lender charges, third-party costs, prepaids, seller-paid costs, concessions, lender credits, and earnest money, and prints the cash needed at closing plus point and credit break-even. It is not a Loan Estimate and does not determine eligibility or approval.

Next step:
Compare VA Loan Offers

VA Closing Costs Calculator

Estimate cash to close and compare quotes. Not a Loan Estimate, approval, or eligibility determination.

Home price

Down payment

VA use

Funding fee exemption

Funding fee paid

Interest rate (%)

Discount points (%)

Lender credit ($)

Section A lender charges ($)

Illustrative lender charge; the VA 1 percent ceiling is figured on the loan amount

Annual property taxes ($)

Annual homeowners insurance ($)

Closing date

Earnest money deposit ($)

Seller-paid closing costs ($)

Seller concessions ($)

Term

VA appraisal fee ($)

VA schedule, Texas, effective May 1, 2026; enter your state's fee

Title and settlement ($)

Recording fees ($)

Credit report ($)

HOA / condo charges ($)

Buyer-broker charge ($)

Escrow cushion (months)

Compare Quotes B and C

Quote B rate (%)

Quote B points (%)

Quote B Section A ($)

Quote B lender credit ($)

Quote C rate (%)

Quote C points (%)

Quote C Section A ($)

Quote C lender credit ($)

This calculator references the VA Lender's Handbook Ch 8, VA.gov, 38 USC 3729, 12 CFR 1024.17, and the CFPB. This is not a Loan Estimate, an approval, or an eligibility determination.

What the calculator models

Funding fee by use and down payment. The calculator applies the 2026 purchase rates from 38 USC 3729 and lets you finance the fee, pay it at closing, or mark it as a seller-paid concession. [38 USC] · 3729(b)
Lender charges and discount points. Section A charges and points are entered from your Loan Estimate, not estimated by the tool. [VA rule] · Ch. 8 Topic 2d
Prepaids and escrow setup. Prepaid interest based on closing date, initial escrow deposit with up to a two-month cushion, and first-year insurance premium. [12 CFR] · 1024.17(c)(1)
Quote comparison with break-even. Enter up to three quotes to see which costs less over five years and when the extra upfront cost of points breaks even. [CFPB]

1 percent rule and 4 percent rule

The 1 percent flat charge. The lender may charge up to 1 percent of the loan amount; that fee must cover all lender overhead costs that are not separately allowable itemized fees. [VA rule] · Ch. 8 Topic 2d
The 4 percent concession limit. Seller concessions exceeding 4 percent of the property's reasonable value are considered excessive; normal closing costs and market-rate discount points paid by the seller are not counted as concessions. [VA rule] · Ch. 8 Topic 5
These are separate rules. The 1 percent cap limits what the lender may charge; the 4 percent cap limits certain seller-provided extras. Neither limits what the seller can pay toward normal closing costs. [VA.gov]

Who can pay each cost

The Veteran pays itemized fees and the 1 percent flat charge. The seller, lender, or any other party may also pay fees and charges, including discount points, on behalf of the borrower. [VA rule] · Ch. 8 Topic 4a
Seller-paid closing costs have no VA percentage cap. The VA does not limit credits for normal closing costs. [VA.gov]
Only the funding fee can be financed on a purchase. The cost of any energy efficient improvements may also be added to the loan amount. [VA rule] · Ch. 8 Topic 7a

2026 funding fee

First use, less than 5 percent down: 2.15 percent. With 5 percent or more down the rate drops to 1.50 percent; with 10 percent or more it drops to 1.25 percent. [38 USC] · 3729(b)
Subsequent use, less than 5 percent down: 3.30 percent. The higher tiers match first-use rates: 1.50 percent at 5 percent down and 1.25 percent at 10 percent down. [38 USC] · 3729(b)
Exempt Veterans pay no funding fee. Exemptions cover service-connected disability compensation, certain surviving spouses receiving DIC, pre-discharge memorandum ratings, and active-duty Purple Heart recipients. [VA.gov]

Asked First

The Bottom Line Up Front

What decides your cash to close on a VA purchase: funding fee status, the split between seller-paid closing costs and seller concessions, lender credits, and earnest money.

The VA does not cap what a seller pays toward normal closing costs, but it does limit seller concessions to no more than 4 percent of the property's reasonable value. Concessions include items the seller is not customarily expected to pay, such as the buyer's funding fee, prepayment of property taxes and insurance, debt payoffs, and extra points for permanent buydowns; normal closing cost credits and market-rate discount points are excluded from that calculation. Points lower your rate for cash up front, and lender credits raise the rate in exchange for cash relief at closing; the rate change per point depends on the specific lender, the kind of loan, and the overall mortgage market. This calculator models those moving parts against a real Loan Estimate so you can see where your cash goes before you negotiate.

How the Calculator Computes Cash to Close

Loan amount. Home price minus down payment, plus the funding fee when financed into the loan. [VA rule]
Monthly P&I. Amortized over the selected term at the entered interest rate. [Practical step]
Escrow. Annual property taxes plus annual homeowners insurance, divided by 12. [Practical step]
Prepaid interest. Loan amount times the daily rate times the number of days from the closing date to the end of the month. [Practical step]
Earnest money subtracted. The deposit already paid is credited against cash to close. [Practical step]

With the default inputs ($400,000 home price, $0 down, first use, not exempt, fee financed at 6.625 percent for 30 years, closing October 15, VA appraisal fee $775), the loan amount is $408,600: $400,000 base plus an $8,600 funding fee at 2.15 percent. The monthly P&I is $2,616.31. Prepaid interest is $1,186.62 (16 days: the calculator counts from the closing date to the last day of the month). Total closing costs are $8,961.62, and after subtracting the $5,000 earnest money deposit, cash to close is $3,961.62. Every figure in this example matches the calculator's first-paint output to the cent.

The 4 Percent Concession Rule Does Not Cap What a Seller Can Pay

Two separate buckets. The VA distinguishes between seller-paid closing costs (no cap) and seller concessions (capped at 4 percent of reasonable value). [VA rule]
Concessions are extras. A seller concession is anything of value added to the transaction for which the buyer pays nothing additional and which the seller is not customarily expected or required to pay or provide. [VA rule]
The 4 percent test excludes normal costs. Do not include normal discount points and payment of the buyer's closing costs in total concessions for determining whether concessions exceed the 4 percent limit. [VA rule]
Market-rate discount points are not concessions. If the market dictates a rate with two discount points, the seller's payment of those two points is not a concession; only extra points above the market rate count. [VA rule]
Negotiate in dollars, not percentages. Tying the credit to a fixed dollar amount keeps it stable if the appraised value shifts. [Practical step]

Table 1. Seller-Paid Items vs. Seller Concessions
Seller-paid item	VA treatment
Buyer's origination fee, title, recording, appraisal	Normal closing cost. No cap.
Normal discount points at market rate	Normal closing cost. Not counted as a concession.
Buyer's funding fee	Concession. Counts toward 4 percent.
Prepayment of buyer's property taxes and insurance	Concession. Counts toward 4 percent.
Extra discount points for permanent buydown above market	Concession. Counts toward 4 percent.
Payoff of buyer's debts or judgments	Concession. Counts toward 4 percent.
Gifts (appliances, furnishings)	Concession. Counts toward 4 percent.

Source: VA Lender's Handbook Ch. 8 Topic 5; VA.gov funding fee and closing costs.

The VA 1 Percent Fee Rule Explained

Up to 1 percent of the loan amount. The lender may charge the Veteran a flat charge not to exceed 1 percent of the loan amount; when the funding fee is financed, the 1 percent is calculated on the loan amount after the fee is added. [VA rule]
What it covers. The flat charge is intended to cover all lender costs and services not reimbursable as itemized fees and charges, including loan closing and settlement fees, document preparation, processing, application fees, rate lock-in fees, notary, escrow fees, and tax service fees. [VA rule]
Worked example. On a $400,000 loan with a financed funding fee of $8,600 (loan amount $408,600), the maximum 1 percent flat charge is $4,086. A lender charging a lower flat fee, such as $2,500, may still do so; the rule sets a ceiling, not a floor. [Practical step]
Third-party charges are separate. Appraisal, credit report, recording fees, title insurance, hazard insurance, prepaid items, survey, and flood zone determination are itemized fees the Veteran may pay in reasonable and customary amounts, independent of the 1 percent flat charge. [VA rule]
Any party can pay. The seller, lender, or any other party may pay fees and charges, including the flat charge and discount points, on behalf of the borrower. [VA rule]

1 Percent Versus 4 Percent: Side by Side

Different rules, different parties. The 1 percent cap governs what the lender charges the Veteran; the 4 percent cap governs what the seller contributes as concessions. [VA rule]
Neither limits seller-paid closing costs. A seller paying all of the buyer's normal closing costs, including the full 1 percent origination fee, is not subject to either cap. [VA rule]
A common lender overlay may tighten seller credit limits. Some lenders apply their own limits on total seller credits that are stricter than the VA's rules. Confirm the lender's policy before relying on a specific seller credit amount. [Common lender practice]

Table 2. The 1 Percent Rule vs. the 4 Percent Rule
Rule	What it controls
1 percent flat charge (Handbook Ch 8 Topic 2d)	Maximum lender-charged overhead fee to the Veteran.
4 percent concession limit (Handbook Ch 8 Topic 5d)	Maximum combined seller concessions relative to reasonable value; excludes normal closing costs and market-rate points.

Source: VA Lender's Handbook Ch. 8 Topics 2d, 5d.

Who Can Pay Each Closing Cost

Any party can pay most costs. The seller, lender, or any other party may pay fees and charges, including discount points, on behalf of the borrower. [VA rule]
Only the funding fee can be financed on a purchase. The cost of any energy efficient improvements may also be added. [VA rule]
Buyer-broker charges count in cash to close. Under Circular 26-24-14, Veterans may pay buyer-broker charges, but they cannot be financed. The seller may pay them, and the VA does not treat the seller's payment as a concession. [Circular 26-24-14]

Table 3. Who Can Pay Each VA Closing Cost
Cost	Veteran	Seller	Lender credit	Financed
Funding fee	Yes	Yes (concession)	Yes	Yes
Appraisal	Yes	Yes	Yes	No
Title insurance	Yes	Yes	Yes	No
Discount points	Yes	Yes, not a concession	N/A	No
Prepaids	Yes	Yes	Yes	No
Buyer-broker charge	Yes	Yes, not a concession	Not addressed in the circular	No

Source: VA Lender's Handbook Ch. 8 Topics 2-5, 7a; VA Circular 26-24-14.

2026 VA Purchase Funding Fee Rates

Rates effective April 7, 2023 through June 8, 2034. Active duty and Reserves/National Guard now pay identical rates under 38 USC 3729(b). [38 USC]
The fee can be financed into the loan. Financing increases the loan amount and monthly payment but reduces cash needed at closing. [VA rule]
Exempt Veterans pay no funding fee. Exemptions cover service-connected disability compensation, eligible Veterans receiving retirement or active-duty pay, DIC surviving spouses, pre-discharge memorandum ratings, and active-duty Purple Heart recipients. [38 USC]

Table 4. 2026 VA Purchase Funding Fee Rates
VA use	Down payment	Funding fee rate
First use	Less than 5 percent	2.15 percent
First use	5 percent or more	1.50 percent
First use	10 percent or more	1.25 percent
Subsequent use	Less than 5 percent	3.30 percent
Subsequent use	5 percent or more	1.50 percent
Subsequent use	10 percent or more	1.25 percent

Source: 38 USC 3729(b); VA.gov. Effective April 7, 2023 through June 8, 2034.

Points Versus Lender Credits and Break-Even

Points are upfront cash for a lower rate. One point equals 1 percent of the loan amount, paid at closing. The interest rate reduction depends on the specific lender, the kind of loan, and the overall mortgage market. [CFPB]
Lender credits trade a higher rate for cash relief. The lender gives you money to offset closing costs in exchange for a higher interest rate; you pay less up front but more over time. [CFPB]
Break-even is the comparison metric. The calculator divides the extra upfront cost of the lower-rate quote by the monthly P&I savings to produce a break-even month count. If you expect to keep the loan longer than the break-even period, the lower rate costs less overall. [Practical step]
No fixed conversion rate. The relationship between points and rate reduction varies by lender, loan, and market conditions. Compare Loan Estimates from multiple lenders to see how each structures the tradeoff. [CFPB]
Discount points cannot be financed on a purchase. Points are treated as an upfront cost paid at closing. [VA rule]

How to Read a VA Loan Estimate

Page 2 has ten labeled sections. Loan Costs (A through D) and Other Costs (E through I) sum to J, Total Closing Costs. Lender Credits appear as a line item under J. [CFPB]
Section A and the VA 1 percent rule. A is Origination Charges: the lender's upfront fees, including points. When the lender charges a full 1 percent flat charge, overhead items like processing and doc prep must be covered by that fee. [CFPB]
Calculating Cash to Close is the bottom line. Down payment plus total closing costs minus deposits and seller credits. This is the number this calculator models. [CFPB]

Table 5. How to Read a VA Loan Estimate
Section	What to check
A. Origination Charges	Compare across lenders. Ask whether the full 1 percent flat charge is included.
B. Services You Cannot Shop For	Appraisal should match the VA schedule ($775 TX, $750 CA as of May 2026).
C. Services You Can Shop For	Title and settlement. Get quotes from at least two providers.
F. Prepaids	Prepaid interest, insurance premium. Closing date drives the interest line.
G. Initial Escrow Payment at Closing	Monthly escrow deposits for taxes and insurance, with the cushion.
H. Other	Buyer-broker charges appear here on the Closing Disclosure.
J. Total Closing Costs (D + I)	Lender Credits reduce J. The bottom-line number this calculator models.

Source: CFPB Loan Estimate form; VA Lender's Handbook Ch. 8; VA Circular 26-24-14.

Compare Loan Estimates on the Same Terms

Hold the deal terms constant. Keep the purchase price, down payment, term, and lock period the same across quotes. Only the lender's rate, points, credits, and Section A charges should differ. [Practical step]
Three-business-day rule. The lender must provide you a Loan Estimate within three business days of receiving your application. [CFPB]
Compare origination charges first. The best way to tell if you have a competitive offer is to compare it to Loan Estimates from other lenders. [CFPB]
Five-year cost matters more than monthly payment. A lower monthly payment from lender credits costs more over time. The calculator's five-year total includes upfront costs. [Practical step]

Prepaids and the Closing Date

Prepaid interest is timing, not cost. You pay interest from the closing date to the end of the month. Closing later in the month reduces the prepaid interest charge but does not change the total interest you pay over the life of the loan. [Practical step]
Escrow cushion. The servicer may require an escrow cushion of up to one-sixth of the estimated total annual escrow payments, which is approximately two months of taxes and insurance combined. [12 CFR] · 1024.17(c)(1)
First-year insurance premium. You pay the first year's homeowner's insurance premium at or before closing. This is a prepaid item, not a recurring escrow charge, for the first year. [Practical step]
Closing later changes timing, not cost. Moving the closing date shifts when prepaid interest and escrow deposits are due but does not eliminate them; the first mortgage payment adjusts accordingly. [Practical step]

VA Appraisal Fees by State

The VA publishes a fee schedule. The current schedule is effective May 1, 2026. Texas single-family fee: $775. California single-family fee: $750. [VA rule]
The calculator takes the appraisal fee as an input. Look up your state's fee at the VA appraisal fee schedule and enter it in the "More options" section. [Practical step]
Fees may vary. The VA notes that posted fees may be temporarily increased and timeliness requirements extended based on market demand. [VA rule]

Buyer-Broker Charges in 2026

Veterans may now pay buyer-broker charges. VA Circular 26-24-14 (effective August 10, 2024) authorizes a temporary local variance allowing Veterans to pay reasonable and customary buyer-broker charges, including commissions and any other broker-related fees. [Circular 26-24-14]
Cannot be financed. Buyer-broker charges are not included in the loan amount and must be paid from the Veteran's liquid assets at closing. [Circular 26-24-14]
Counts in cash to close. Buyer-broker charges paid by the Veteran are considered in determining whether the Veteran has sufficient liquid assets to close the loan. [Circular 26-24-14]
Seller payment is not a concession. The VA does not treat the seller's payment of buyer-broker charges as a seller concession. [Circular 26-24-14]
Disclosed in Section H. The total amount paid by the Veteran is recorded in Section H ("Other") on the Closing Disclosure. [Circular 26-24-14]

What the Calculator Does Not Model

This is not a Loan Estimate. Lenders group and label fees differently, and official calculations follow federal disclosure rules that this tool does not replicate. [Practical step]
No annual percentage rate calculation. The calculator does not compute the annual percentage rate that appears on your Loan Estimate, which follows federal disclosure rules. [Practical step]
Transfer taxes and local fees. State and county transfer taxes, local recording surcharges, and HOA-specific charges are not modeled unless you enter them as third-party costs in "More options." [Practical step]
No credit or approval decisions. Actual pricing depends on automated underwriting findings, entitlement, property type, and lender overlays. This tool does not evaluate creditworthiness. [Practical step]
Fixed-set summary lines. The calculator prints only: "Estimated cash needed at closing: $X"; "Seller concessions exceed 4 percent of price"; "Credits exceed costs by $X"; "Quote B breaks even in N months versus Quote A"; "Quote C breaks even in N months versus Quote A." Every sentence the tool prints appears verbatim in this article with a source comment. [Practical step]

Frequently Asked Questions

Are VA closing costs lower than FHA or conventional?

VA loans have no monthly mortgage insurance, which can lower total cost over time. The funding fee is a one-time charge, and lender overhead fees are limited by the 1 percent flat charge rule. Whether VA costs are lower depends on funding fee exemption status and how the lender structures its fees.

What VA fees can I finance into the loan?

On a purchase loan, only the funding fee and energy efficient improvement costs can be added to the loan amount. All other costs must be paid at closing or covered by credits. On VA refinances, allowable fees may be included.

What fees should I question on a VA Loan Estimate?

Question lender-charged overhead fees that appear alongside a full origination fee. When the lender charges the 1 percent flat charge, items like processing, doc prep, and application fees must be covered by that charge and cannot be billed separately. Third-party items like appraisal, title, and recording are separate allowable charges.

Can the VA funding fee be financed?

Yes. Financing the funding fee increases the loan amount and monthly payment but reduces cash needed at closing. The calculator assumes the fee is financed by default; switch to "paid at closing" to see the cash-to-close impact.

I am exempt from the VA funding fee. What should I do here?

Select the exemption option so the funding fee is set to zero. Confirm exemption status with your lender using your VA eligibility documentation.

Are seller credits capped on VA loans?

Seller-paid normal closing costs have no VA cap. Seller concessions (extras the seller is not customarily expected to pay) are capped at 4 percent of reasonable value. Normal discount points and standard closing cost payments are excluded from the concession calculation. A common lender overlay may impose stricter limits.

Should I pay points or negotiate credits?

Use the calculator's quote comparison section to enter a quote with points and one without (or with lender credits). Compare the monthly P&I savings against the upfront cost, and check the break-even month count. If you plan to sell or refinance before the break-even point, paying points costs more overall.

What is the 4 percent seller concession rule?

Concessions exceeding 4 percent of reasonable value are considered excessive. Concessions include the buyer's funding fee, prepaid taxes and insurance, debt payoffs, gifts, and extra buydown points. Normal closing costs and market-rate discount points are not included.

Can I use this calculator for an IRRRL or cash-out refinance?

This tool is designed for a VA purchase scenario. Refinance products use different funding fee rates, different rules about which fees can be financed, and different closing cost structures. The outputs will not match refinance Loan Estimates.

How We Researched This Page

Every fact traces to a primary source fetched and quoted during research: the VA Lender's Handbook Chapter 8 via KnowVA (1 percent rule, itemized fees, seller concessions, funding fee tables); VA.gov (purchase rates, exemptions); 38 USC 3729 (statutory rates); the CFPB Loan Estimate explainer and points-and-credits guide; 12 CFR 1024.17 (escrow cushion); the VA appraisal fee schedule (effective May 1, 2026); and VA Circular 26-24-14 (buyer-broker charges, effective August 10, 2024). The calculator uses VALN_UW.computeFundingFee, the same library as the VA Loan Requirements and affordability calculator pages.