VA vs. FHA vs. conventional: the 2025 numbers
We compared every comparable home purchase loan reported under HMDA for 2025: 30-year fixed-rate, conforming-size loans on single-family primary residences.
| 2025 purchase loans | VA | FHA | Conventional |
|---|---|---|---|
| Median interest rate | 6.125% | 6.25% | 6.625% |
| APR vs. average prime rate (median) | −0.36 | +0.43 | +0.16 |
| Lender origination charges (median) | $895 | $2,493 | $1,966 |
| Total loan costs (median)* | $6,510 | $11,271 | $5,516 |
| 2025 purchase denial rate | 8.2% | 12.8% | 15.3% |
| Loans in the comparison | 297,170 | 565,735 | 1,464,344 |
Source: 2025 HMDA data, CFPB/FFIEC. Originated first-lien purchase loans on a primary residence; 30-year fixed, conforming-size, single-family. "APR vs. average prime rate" is HMDA's rate spread: the loan's APR minus the average rate offered to prime borrowers that week. Denial rates cover all first-lien purchase applications on a primary residence. *See the note on total loan costs below.
Are VA loan rates lower than conventional?
Yes. The median VA purchase rate in 2025 was half a percentage point lower than conventional, and an eighth of a point lower than FHA. VA loans were also the only type whose typical APR came in below the average rate offered to prime borrowers.
What half a point means
On the median VA loan amount of $355,000, a 30-year fixed rate of 6.125% is about $2,157 a month in principal and interest. At 6.625% it's about $2,273. That's roughly $116 a month, before counting the PMI a conventional borrower with less than 20% down would also pay.
These are national medians, not quotes. Borrowers in each group differ in credit, down payment and loan size, and your rate depends on your file, your lender and the day you lock. It's one more reason the "VA rates are higher" myth doesn't hold up.
Do VA loans cost more at closing?
Lender charges: no. The median origination charge, which is what the lender charges to make the loan, was $895 on VA purchase loans versus $1,966 for conventional and $2,493 for FHA.
Total loan costs: it depends on the funding fee. Total loan costs include origination charges, third-party services like the appraisal and title, and government fees. On VA loans that includes the VA funding fee when it's charged, and on FHA loans the 1.75% upfront mortgage insurance. Conventional loans have no upfront government fee, which is why their median is lowest, but most conventional buyers with less than 20% down pay monthly PMI instead.
The VA funding fee can be rolled into the loan, and it's waived entirely for veterans receiving VA disability compensation, some surviving spouses and Purple Heart recipients on active duty.
How the three loans compare, rule by rule
| VA | FHA | Conventional | |
|---|---|---|---|
| Who can use it | Eligible veterans, service members, Guard/Reserve and some surviving spouses | Anyone who qualifies | Anyone who qualifies |
| Minimum down payment | 0% | 3.5% | 3% (most programs) |
| Monthly mortgage insurance | None | Yes, usually for the life of the loan with less than 10% down | PMI with less than 20% down, removable later |
| Upfront fee | VA funding fee (2.15% first use with 0% down); waived for veterans receiving VA disability compensation | 1.75% upfront mortgage insurance | None |
| Minimum credit score | No VA minimum; set by each lender | 580 for 3.5% down | Usually 620 |
| Qualifying | Debt-to-income plus a residual income test | Debt-to-income | Debt-to-income |
| Loan limit | None with full entitlement | County FHA limits | County conforming limits |
| Property use | Primary residence (1–4 units) | Primary residence (1–4 units) | Primary, second home or investment |
| Assumable by a future buyer | Yes, with lender approval | Yes, with lender approval | Usually no |
When a VA loan might not be the best fit
- You're putting 20% or more down and you'd pay the funding fee. A conventional loan has no upfront fee and no PMI at 20% down, so compare the two side by side.
- You're buying a second home or investment property. VA and FHA loans require that you live in the home.
- The property won't meet VA's Minimum Property Requirements and the repairs can't be done before closing.
For most eligible buyers purchasing a home to live in, though, the VA loan comes out ahead on down payment, monthly cost and rate.
Not sure which loan fits your situation? Book a free call to compare your options side by side.
Book a call →Frequently asked questions
Are VA loan rates lower than conventional rates? +
Yes, on average. In 2025, the median rate on a 30-year fixed VA purchase loan was 6.125%, compared with 6.625% for conventional and 6.25% for FHA, according to federal HMDA data. Your own rate depends on your credit, the lender and the market on the day you lock.
Is a VA loan better than an FHA loan? +
For most eligible borrowers, yes. VA loans require no down payment and no monthly mortgage insurance, while FHA requires 3.5% down and usually charges mortgage insurance for the life of the loan. In 2025 VA purchase loans also had a lower median rate and lower lender origination charges than FHA.
Should I use a VA loan or a conventional loan? +
If you're eligible and buying a primary residence, a VA loan is usually the stronger choice: no down payment, no PMI and a lower median rate in 2025. A conventional loan can make sense if you're putting 20% or more down and would otherwise pay the VA funding fee, or if you're buying a second home or investment property.
Do VA loans have higher closing costs? +
Lender charges are usually lower. In 2025 the median origination charge was $895 on VA purchase loans versus $1,966 on conventional. Total loan costs can look higher on VA loans because they include the VA funding fee when it's charged, which can be financed into the loan and is waived for veterans receiving VA disability compensation.
Is a VA loan or conventional loan better for the seller? +
For most sellers there's little difference. Both can close in 30 days or less, and seller-paid costs are negotiable on both. The main difference is the VA appraisal's Minimum Property Requirements.
Related: VA loan denial rates (2025 data) · Do sellers accept VA loans? · All VA loan guides
About this data
Figures come from 2025 Home Mortgage Disclosure Act (HMDA) data published by the CFPB and FFIEC. Rate and cost figures cover originated first-lien home purchase loans on a primary residence that were 30-year fixed-rate, conforming-size and secured by a single-family, site-built home, excluding business-purpose, reverse and open-end loans: 297,170 VA, 565,735 FHA and 1,464,344 conventional loans. All figures are medians. Total loan costs are the Closing Disclosure total of loan costs. Borrower credit, down payment and loan size differ across loan types, so these are national comparisons, not quotes.
Source: CFPB/FFIEC HMDA Data Browser