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Mortgage Rates by Loan Product
Mortgage Rate ReportSaturday, February 24, 2018
Mortgage rates paused their upward climb this week and were mostly flat. Rates had been moving higher much of this year despite the Federal Reserve's decision to hold rates steady in its January meeting. The Fed pointed to lower than targeted inflation as an offset to improving household spending, business investment and labor market conditions in its decision to hold the Federal Funds rate at 1.250% to 1.500%. While the Fed left interest rates unchanged, its meeting statement and recently released minutes laid the groundwork for gradual rate increases over the course of 2018 and potentially more aggressive moves depending on how the economy performs in the coming months. The January Fed meeting minutes released this week highlighted robust economic growth and a strengthening labor market. Analysts are predicting that increasing wages and rising inflation fears may provide the catalyst for the Fed to increase interest rates sooner rather than later.
Inflation concerns plus favorable economic indicators have contributed to higher treasury yields and increased stock volatility, which has pushed mortgage rates higher in 2018. While mortgage rates were mostly steady this week, they continue to sit near a four year high.
The interest rate for a 30 year fixed rate mortgage held at 4.250% while the interest rate for a 15 year mortgage remained at 3.625%. The interest rate on a 5/1 adjustable rate mortgage (ARM) also remained flat at 3.625%. FHA mortgage rates and VA mortgage rates were stable at 3.750%, with both programs remaining appealing to borrowers focused on low or no down payment loan options, especially first-time home buyers. Non-owner occupied mortgage rates stayed put at 4.500% while jumbo mortgage rates bucked the flat trend and rose 0.125% to 4.375%.
The Federal Reserve's decision to keep interest rates unchanged in January did not fool anyone, especially mortgage rates. Despite their pause this week, mortgage rates appear to be unable to resist the gravitational pull of a accelerating economy and growing inflation concerns. With the Fed reinforcing its outlook for multiple rate hikes in 2018, prospective borrowers looking to buy a home or refinance their mortgage may be able to lock in a lower mortgage rate by acting now. While interest rates are impossible to predict, the Fed meeting minutes reinforce that indications of increasing inflation could cause the Fed to act more aggressively on rates.
Because mortgage rates fluctuate daily, we continue to actively monitor the mortgage market for updates. Borrowers should check the FREEandCLEAR mortgage rate tables regularly to review customized, updated mortgage rates for lenders in their area. Our rate tables are free to use and require no personal information.
Why Select an VA Mortgage
No Down Payment.
The VA home loan program enables eligible borrowers to buy a home with no down payment which means they can get a mortgage for 100% of the property purchase price. Most mortgage programs require borrowers to make a down payment of 3% - 20%. Active and retired military personnel, including individuals in the reserves and national guard are eligible for the VA home loan program.
Low Interest Rate.
The interest rate for a VA mortgage is typically .250% - .500% lower than the current interest rate on a conventional loan or other low / no down payment mortgage programs. This is because military personnel are considered credit-worthy borrowers and because the government guarantees 25% of the loan amount, which protects the lender against default. To help pay for the guarantee, VA loan program requires borrowers to pay a one-time, up-front VA funding fee. The funding fee ranges from 1.25% - 2.15% of the loan amount depending on your down payment, type of military service and if this your first time using a VA mortgage program.
No Ongoing Mortgage Insurance.
Unlike the FHA program and most other low or no down payment mortgage programs, the VA program does not require borrowers to pay an ongoing mortgage insurance premium. Not requiring ongoing mortgage insurance reduces your total monthly housing expense and makes owning a home more affordable.
For Home Purchases and Refinancings.
Borrowers can use the VA home loan program to buy a home or to refinance their existing mortgage. The VA offers a special refinance program, also known as a VA Streamline or IRRRL Refinance, that requires less paperwork than a regular refinance, making the process more efficient for borrowers. The VA also offers the the VA Energy Efficient Mortgages (EEM) Program that enables borrowers to include up to $6,000 in energy efficiency home improvements in their VA loan amount.
Why Borrowers Compare Mortgage Rates on FREEandCLEAR
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More FREEandCLEAR Mortgage Resources
Determine what size VA mortgage you qualify for and the amount of the required up-front VA funding fee
Review our in-depth overview of of the VA home loan program including borrower qualification guidelines and loan limits
Review our detailed comparison of low and no down payment mortgage programs including key program attributes and eligibility requirements
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