Veterans in the United States have access to unique benefits when it comes to home financing—one of the most valuable being VA mortgage refinancing. With mortgage rates fluctuating and home values rising, many veterans are asking: “Is now a good time to refinance?” If you’re looking to lower your monthly payments, reduce your interest rate, or tap into your home’s equity, VA refinance loans could be your ideal path.
In this article, we’ll explore the best mortgage refinance rates for veterans, compare top lenders, and cover everything you need to know in 2025.
What Is a VA Refinance Loan?
A VA refinance loan is a mortgage refinancing option backed by the U.S. Department of Veterans Affairs. It allows eligible veterans, active-duty service members, and surviving spouses to refinance their existing mortgage under more favorable terms. There are two main types:
- VA IRRRL (Interest Rate Reduction Refinance Loan): For lowering your interest rate or switching from an adjustable-rate to a fixed-rate loan.
- VA Cash-Out Refinance: For accessing home equity to pay off debt, make renovations, or cover other expenses.
Benefits of VA Refinance Loans
- No private mortgage insurance (PMI)
- Competitive interest rates
- No prepayment penalties
- 100% financing in cash-out options (in some cases)
- Simplified process for IRRRL
Best VA Refinance Lenders in 2025
1. Veterans United Home Loans
- Avg. Refinance Rate: 6.25% (APR may vary)
- Why Choose: #1 VA lender in the country, fast processing, 24/7 customer support.
- Ideal For: Veterans looking for expert VA mortgage guidance.
2. Navy Federal Credit Union
- Avg. Refinance Rate: 6.15% (for qualified members)
- Why Choose: Offers exclusive rates to veterans, members-only perks.
- Ideal For: Military families and current/former service members.
3. USAA
- Avg. Refinance Rate: 6.30%
- Why Choose: Trusted military lender, excellent customer service.
- Ideal For: Veterans who already bank with USAA.
4. Rocket Mortgage (by Quicken Loans)
- Avg. Refinance Rate: 6.45%
- Why Choose: Streamlined online process, flexible loan terms.
- Ideal For: Tech-savvy veterans seeking quick approvals.
5. PenFed Credit Union
- Avg. Refinance Rate: 6.40%
- Why Choose: Competitive rates, low fees, member benefits.
- Ideal For: Veterans looking for cash-out refinance options.
Note: Rates mentioned are approximate and may change based on credit score, loan amount, term, and location.
Tips to Get the Best VA Refinance Rate
- Improve your credit score: A higher score = better rates
- Compare multiple lenders: Don’t settle for the first offer
- Lock in your rate: If rates are expected to rise, secure your rate early
- Lower your debt-to-income ratio: Lenders favor borrowers with less debt
- Consider shorter loan terms: 15-year options may offer lower interest rates
Who Is Eligible for VA Refinance?
To qualify for a VA refinance loan in 2025, you typically need to meet the following:
- Must be a veteran, active-duty service member, or eligible surviving spouse
- Must have a valid Certificate of Eligibility (COE)
- For IRRRL: Your existing loan must be a VA loan
- For Cash-Out: You may refinance a non-VA loan if eligible for VA benefits
- Meet credit and income guidelines set by the lender
VA Refinance Closing Costs
Although VA loans are known for low upfront costs, you should be aware of:
- Funding Fee: 0.5% to 3.6% (may be waived for disabled veterans)
- Appraisal Fee (if required): $400–$700
- Title & Insurance Fees: Varies by lender
- Other Lender Fees: Can include origination or underwriting fees
Some of these costs can be rolled into the loan or covered through lender credits.
FAQs: Mortgage Refinance for Veterans
Q1: Can I refinance a non-VA loan into a VA loan?
Yes, through a VA Cash-Out Refinance, you can convert a conventional or FHA loan into a VA-backed mortgage if you qualify.
Q2: How long does the VA refinance process take?
It typically takes 30 to 45 days, depending on the lender and the type of refinance.
Q3: Is a home appraisal required for VA refinance?
Not always. VA IRRRL loans usually don’t require an appraisal. Cash-out refinances do.
Q4: What credit score do I need for a VA refinance loan?
Most lenders prefer a credit score of 620 or higher, but some may approve lower scores.
Q5: Can I skip a mortgage payment when I refinance?
No. While closing timing may delay a payment, you’re still responsible for interest accrual during the transition.
Q6: Is refinancing worth it in 2025?
If your current rate is significantly higher than today’s VA rates, or if you need access to equity, refinancing can lower payments or provide financial relief.
Final Thoughts
VA mortgage refinancing is a powerful benefit that can help veterans save thousands over the life of their loan. Whether you want to reduce your interest rate, access cash, or switch loan terms, today’s VA refinance programs offer flexibility and competitive terms. Always compare lenders, ask about closing costs, and consult with a mortgage advisor to ensure the best deal.