How Much Can You Afford With a VA Loan?

No required down payments make these loans an attractive option

If you're a veteran of the U.S. military, an active-duty service member of the U.S. Armed Forces or the surviving unmarried spouse of a veteran who died because of his or her military service, you might qualify for a VA loan, a mortgage insured by the U.S. Department of Veterans Affairs.

That's a good thing, especially if you have limited cash flow. Unlike other mortgages, a VA loan requires no down payment.

But even without the financial challenge of coming up with a down payment, you must be careful when taking out a VA loan to not overspend on a home. If you do, you'll be stuck with a monthly payment that you might not be able to afford.

How much should you borrow with a VA loan? That depends on your monthly income, debts and however much wiggle room you have in your household budget for a new mortgage payment.

How Much Can You Afford With a VA Mortgage?

Because they require no down payment, VA loans represent a way for veterans, service members and other eligible borrowers to achieve their dreams of owning a home even if they don't have thousands of dollars in cash to devote to a down payment.

While a VA loan can make it easier for you to buy a home, you'll still need to consider how much home you can buy. You don't want to purchase a home that will leave you with a mortgage payment that you can't or can barely afford each month. This is known as being house poor: devoting nearly all your available cash flow to paying your mortgage and additional bills each month, leaving little left over for discretionary spending, building an emergency fund or paying down your existing debt.

Don't let the lack of a down payment convince you to overspend on a home that you can't afford.

VA Loan Entitlement and Limits

Before you can qualify for a VA loan, you'll need to request a Certificate of Eligibility from the U.S. Department of Veterans Affairs. This certificate shows mortgage lenders that you qualify for a VA-insured loan based on your service history and duty status. You can request this certificate directly from the Department of Veterans Affairs here.

It's important to understand VA loan entitlements, too. Your loan's entitlement is the maximum amount that the Department of Veterans Affairs will pay your lender if you don't pay back your loan. This amount varies depending on the size of your loan.

These entitlements are important. As in all years, there are no VA loan limits in 2025 set by the Department of Veterans Affairs. How much you can borrow with a VA-insured loan depends on your income, credit score and other financial factors. That's because the VA's entitlements protect lenders if you stop making your payments.

Factors Impacting Your VA Loan Home Affordability

Several factors determine how much you'll be able to borrow with a VA loan. These include your income, credit score, debt-to-income ratio and the size of your down payment.

Income

Your lender will check your income to determine how much of a mortgage payment you can cover each month. When you apply for a VA loan, you'll typically need to provide your lender copies of your two most recent paycheck stubs and last two years of income-tax statements. Your lender will use these documents to verify your income.

A good rule of thumb is that you should spend no more than 28% of your gross monthly income, your income before taxes and other deductions are taken out, on your mortgage payment, including the amount you pay for property taxes and homeowners' insurance. If your monthly income before taxes is $6,000, the 28% rule says you should spend no more than $1,680 on your mortgage payment.

Credit Score

VA loans don't require perfect credit. Though the U.S. Department of Veterans Affairs doesn't publish a minimum required credit score, national credit bureau Experian says that most lenders require a minimum FICO score of 620 to 670 for a VA loan. FICO reported that the average FICO score for U.S. consumers stood at 715 in September of 2025, well above that minimum required score for a VA loan.

Debt-to-Income Ratio

Your debt-to-income ratio measures how much of your monthly income certain debts eat up. It varies, but most mortgage lenders prefer that your debt-to-income ratio equals no more 36%, though some might allow a debt-to-income ratio as high as 45%.

Debts included in your debt-to-income ratio include your new mortgage payment; the payments you make each month on student, personal and auto loans; your minimum monthly credit card payments; and any child-support or alimony payments you must make.

Your debt-to-income ratio is another factor that determines how much you can borrow with a VA loan. If you have a high amount of credit card and other loan debt, you might not qualify for a larger mortgage because a higher monthly mortgage payment might boost your debt-to-income ratio too high.

Down Payment

You don't typically need to provide a down payment when taking out a VA loan. But providing a down payment can make your mortgage more affordable. Consider closing costs, which usually run from 2% to 6% of your mortgage amount. If you provide a larger down payment, your mortgage will be smaller, leading to lower closing costs. A larger down payment also lowers your monthly payment because you're borrowing less money.

Interest Rates

Mortgage interest rates affect how much you can borrow with a VA loan. Higher mortgage rates mean higher monthly payments, potentially limiting how many mortgage dollars you can borrow.

Say you take out a $350,000 fixed-rate 30-year mortgage at an interest rate of 6.5%. Your monthly payment, not counting property taxes and homeowners' insurance, will be $2,212.24. If you take out the same loan but your interest rate is 7%, your monthly payment, again not counting taxes and insurance, will be $2,328.56.

You might qualify for a lower interest rate if you take out a VA loan. That can make a VA loan a more affordable option.

Loan Terms

A longer loan term results in lower monthly mortgage payments because you are extending the number of months needed to pay back what you borrow.

Say you take out a $325,000 30-year fixed-rate mortgage at an interest rate of 6.5%. Your monthly payment, not counting taxes and insurance, will be $2,054.22. If you borrow the same amount but with a 15-year fixed-rate loan at an interest rate of 5.8%, your monthly payment not including taxes and insurance will jump to $2,707.54.

If you want to borrow more with your VA loan, it might make sense to apply for a mortgage with a longer term. Just know that you'll pay far more in interest for a longer-term loan.

Property Taxes

Your mortgage payment will typically include not only the money you pay for your loan's principal and interest, but also extra dollars to help cover your property taxes and homeowners' insurance. This money will go into an escrow account set up by your lender. Your lender will then use the funds in this account to make your property tax payments on your behalf. This guarantees that you won't miss this important payment.

The estimated amount you pay each year in property taxes will help determine how much you can borrow with a VA loan. You might be able to afford the mortgage on a $325,000 home if your yearly tax bill is $4,000 or less. But if you are moving into an area where the yearly property taxes are $8,000 or more? Those extra dollars that you'll need to pay each month might make the total mortgage payment on that $325,000 home unaffordable for your budget.

No Private Mortgage Insurance

VA loans don't require private mortgage insurance, better known as PMI. This insurance, required on conventional mortgage loans, protects your lender if you fail to make your payments. Because VA loans don't require this, your monthly mortgage payment might be smaller, making a VA loan a more affordable option.

But you will have to pay a one-time VA funding fee. Most first-time buyers who don't provide a down payment will pay a VA funding fee equal to 2.15% of the loan amount. You can pay this upfront or roll it into your mortgage. If you do the latter, your monthly mortgage payments will be slightly higher.

Home Insurance

Just like with your property taxes, the amount you must pay each year for homeowners' insurance will limit how much you can borrow with a VA loan. If your lender requires that you enter into an escrow agreement – and most do – you'll need to provide extra dollars, too, to cover your property insurance bills.

If your annual homeowners' insurance bill is $2,400, you'll need to send $200 extra with each monthly payment. If you can qualify for a mortgage of $300,000, you might need to look for a home with a slightly lower price tag if $200 of your payment each month will be devoted to property insurance.

Calculate What You Can Afford With a VA Home Loan

How can you determine how much you can afford to borrow with a VA home loan? Your best bet is to get pre-approved.

During pre-approval, your lender will review your credit, income and debts to determine how much of a mortgage you can afford. Armed with this information, you'll know when a home is too expensive for your budget. Pre-approvals are free and you are not obligated to take out your final VA mortgage with the lender that pre-approved you.

You can also use online tools such as our VA Loan Affordability Calculator to help calculate how much of a home you can afford.

Home Affordability and VA Loans: What to Know

Knowing how much home you can afford can save you time and frustration during your home search. You don't want to waste time touring homes with price tags of $400,000 or more if you can only qualify for a VA mortgage of $350,000.

Freedom Mortgage can help you navigate the lending process and help you determine not only how much of a mortgage you can afford, but which home loan type is best for you.