VA IRRRL Viability Calculator

Given today's IRRRL rate, find the minimum existing rate at which a VA streamline refinance passes the Net Tangible Benefit tests — then check your own rate.

Your loan & today's IRRRL

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2% is a reasonable planning default for a streamlined IRRRL, not a fixed rule. IRRRL closing costs cover lender, title, and recording charges plus prepaids, and typically land somewhere around 2%–5% of the loan amount depending on the lender and your state. This figure is separate from the VA funding fee below.

What moves it:

• Lender fees — origination/underwriting can be a flat fee or up to 1% of the loan; some lenders waive it. VA caps lender origination at 1%.
• Rate vs. cost trade-off — a slightly higher rate can buy a lender credit that covers most costs (a "no-cost" IRRRL), lowering this number toward 0% but shrinking your monthly savings.
• Title & state charges — title insurance, recording, and transfer taxes vary widely by state.
• Prepaids & escrow — funding a new escrow account adds cash to close, but escrowed taxes/insurance are excluded from VA's recoupment math.

Set this to your Loan Estimate figure once you have real quotes. Lowering it lowers the minimum existing rate needed for viability.

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The VA funding fee is a one-time charge separate from closing costs. For an IRRRL it is 0.5% of the loan for most borrowers and is usually financed into the new balance. It's excluded from the 36-month recoupment test by statute — only the other closing costs have to be recouped.

You're exempt (0%) if you are:

• A veteran receiving VA compensation for a service-connected disability;
• A veteran who is entitled to that compensation but is receiving retirement or active-duty pay instead;
• A veteran rated eligible after a pre-discharge exam, or entitled based on a proposed/memorandum rating;
• A surviving spouse of a veteran who died in service or from a service-connected disability (or receiving DIC);
• A service member with a Purple Heart on active duty.

Exemption is confirmed on your Certificate of Eligibility (COE). Flip the toggle to Exempt to remove the fee from the math.

Separate from closing costs; financed into the loan.

The answer

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At the minimum viable existing rate

Min. existing APR
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to be VA-viable
Monthly P&I savings
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at that rate
Lifetime savings
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over the loan

Your current rate

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Monthly P&I savings
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Recoupment period
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Lifetime savings
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Recoupment period vs. existing rate

Months to recoup closing costs from monthly P&I savings, across possible existing rates. It must sit at or below the 36-month line to pass. The dot marks the minimum viable existing rate.

How VA IRRRL viability is decided (Net Tangible Benefit)
  • Rate-reduction test. The new rate must be at least 0.50% below your current rate for a fixed-to-fixed refinance, or at least 2.00% below for fixed-to-ARM (38 U.S.C. § 3709(b)).
  • 36-month recoupment test. All fees and closing costs — excluding taxes, amounts held in escrow, and the VA funding fee — must be recouped by your lower monthly principal & interest within 36 months (§ 3709(a)). Recoupment = recoupable costs ÷ monthly P&I savings.
  • Both must pass. The minimum viable existing rate is whichever of the two tests is stricter for your inputs.
  • Seasoning (separate requirement). Not modeled here: you must have made at least 6 consecutive payments and be at least 210 days past your first payment due date.
  • Term note. Resetting to a new 30-year lowers the monthly payment (making recoupment easier), but stretches payments out — which is why lifetime savings can shrink dramatically even when the monthly drop looks great.

Estimates only. This tool models VA's two core Net Tangible Benefit tests to illustrate viability; it is not a loan quote, an approval, or financial advice. Lender fees, title costs, and funding-fee exemptions vary — use your official Loan Estimate for real figures and confirm eligibility with a VA-approved lender.