Understanding 15-Year VA Loans and Who They’re Best For

When many Veterans think about buying a home, a 30-year VA loan often comes to mind and for good reason. It’s familiar and offers lower monthly payments that can make homeownership feel more affordable.

But it’s not the only option.

VA loans come with built-in flexibility, including the length of your loan term. While 30 years is the most common choice, shorter repayment options are available. Choosing a 15-year VA loan could help you build equity faster and save money on interest over time.

Veterans United finances VA loans with 15, 20, 25 and 30-year fixed terms. If you’re interested in how a 15-year VA loan could work for you, talk to a Veterans United loan specialist at 855-870-8845.

15-Year VA Home Loan Requirements

The basic VA eligibility requirements for a 15-year loan are the same as those for a 30-year loan. Every applicant must meet the service guidelines set by the Department of Veterans Affairs.

Many Veterans and service members qualify for a VA loan, and in some cases, certain family members may also be eligible. Here's a quick look at who typically qualifies:

• Veterans who served 90 consecutive days of active service during wartime
• Veterans who served 181 days of active service during peacetime
• Those who have 6 years of service in the National Guard or Reserves or served 90 days (at least 30 of them consecutively) under Title 32 orders
• The spouse of a service member who died while serving or died from a service-related disability

If you fit these requirements, you can apply for a Certificate of Eligibility (COE) through the VA or your lender. This document shows lenders that you meet the service requirements qualify for a VA loan.

Financial Requirements for a 15-Year VA Loan

While the VA’s basic eligibility criteria remain the same, lenders often apply more financial scrutiny when you choose a 15-year term. That’s because monthly mortgage payments are typically higher than with a 30-year loan.

Lenders will review your income, credit history, assets and debt-to-income ratio (DTI) to determine whether you're financially ready to take on a shorter loan term.

If your income isn’t reliable and stable, your lender may not approve your loan application. You may receive a higher interest rate on a if the lender considers you a higher-risk borrower.

Benefits of Choosing a 15-Year VA Loan

A 15-year VA loan combines the savings power of a shorter mortgage term with the unique benefits of a VA loan. That means less interest, no down payment and no private mortgage insurance — just to name a few.

Here’s a look at the key advantages:

No Down Payment Required

With a VA loan, most eligible Veterans and service members can buy a home without making a down payment. That’s a huge financial advantage, and it can eliminate the pressure of saving tens of thousands of dollars before you’re ready to purchase.

Keep in mind that while a down payment isn’t required, you’ll still have VA loan closing costs to cover. However, homebuyers can negotiate with the seller to help with some of those expenses.

No Private Mortgage Insurance Needed

Conventional loans typically require private mortgage insurance (PMI) if you put down less than 20%. PMI can add hundreds to your monthly payment.

VA loans don’t require PMI because the Department of Veterans Affairs backs the loan. This safety net reduces risk for lenders without passing the burden onto borrowers. It helps lower your monthly housing cost and allows you to put more of your payment toward your loan balance.

For example, a conventional borrower with a loan amount of $300,000 and 1% PMI rate can expect to pay $250 a month or $3,000 a year for mortgage insurance. With a VA loan, you avoid that cost altogether.

Pay Significantly Less Interest Over the Life of the Loan

One of the biggest advantages of a 15-year VA loan is the potential for significant interest savings. VA loans already offer competitive interest rates, and lenders often offer even lower rates for shorter terms like 15 years.

According to Optimal Blue data, the average interest rate for a 15-year conforming loan in 2025 so far is about 6.01%, while 30-year rates are averaging around 6.76%. VA loan rates typically follow a similar pattern, so choosing a shorter term could mean locking in a better rate.

Let’s say you buy a $400,000 home using a VA loan with no down payment and a 6% interest rate:

• Over 30 years, you’d pay around $463,000 in total interest
• Over 15 years, your total interest would drop to about $205,000

That’s a difference of over $250,000 just by choosing a shorter repayment term.

Build Home Equity Quicker

A 15-year loan term means each payment builds equity in your home much faster. With a shorter loan term, the principal is paid down quickly, reducing overall interest costs and increasing home equity at an accelerated rate.

Here’s a simple example:

On a $300,000 VA loan with 0% down and a 5.5% interest rate, a 30-year loan builds about $4,000 in equity after one year. Under the same terms, a 15-year loan builds more than $13,000 in equity.

That’s more than three times the progress in the same amount of time.

You can also tap into your home equity down the road to refinance, fund major expenses or give yourself more options if life changes.

Pay Off Your Home Sooner

As your equity grows, so does your path toward full homeownership.

With a 15-year VA loan, you’ll pay off your mortgage in half the time compared to a 30-year loan. Once the loan is paid off, you can free up a large portion of your monthly budget and focus on other priorities. That might mean saving for retirement, supporting your family or simply having more breathing room each month.

Many Veterans say there’s peace of mind in owning a home outright. No more monthly payments, just a place that’s fully yours.

Considerations When Choosing a 15-Year VA Loan

While there are clear advantages to a shorter loan term, a 15-year VA loan won’t be the right fit for everyone. It’s important to look at both the benefits and the trade-offs to decide what makes the most sense for your financial goals.

Here are the main challenges of a 15-year VA mortgage:

Higher Monthly Mortgage Payments

The big downside of a 15-year mortgage is that it locks you into a higher monthly mortgage payment. Because you’re paying off the loan in half the time, each payment has to cover a larger portion of the principal along with interest. That often means a noticeably higher monthly cost compared to a 30-year loan.

For some buyers, the higher payment is manageable and worth the long-term savings. But if your budget already feels tight, a 15-year mortgage could put added pressure on your day-to-day finances.

See how a higher monthly payment fits into your budget with our VA home loan calculator.

May Qualify for Lower Loan Amount

One thing to keep in mind with a 15-year VA loan is how it affects your homebuying power. Lenders look closely at your debt-to-income (DTI) ratio, which compares your monthly debt payments to your monthly income. Most VA lenders prefer a DTI at or below 41%.

Because a 15-year loan comes with a higher monthly payment, it can raise your DTI and lower the amount a lender is willing to approve. That means you might qualify for a smaller loan amount than you would with a 30-year mortgage.

If you're set on a certain price range, this is an important factor to consider.

Less Budget Flexibility

Since a 15-year VA loan comes with a higher monthly payment, it can take up a larger share of your budget. That may leave less room for other financial goals, like building your savings, investing or setting aside money for unexpected expenses.

If your income is steady and you’ve got some financial cushion, the trade-off may be worth it for the long-term savings. But if your budget is already tight, it’s important to think through how a higher payment might affect your day-to-day flexibility.

Must Be Primary Residence

Like all VA loans, a 15-year VA loan must follow occupancy requirements and be used for your primary residence. You need to live in the home full-time, and the loan can’t be used for a second home, vacation property or investment purchase.

If you're planning to build a real estate portfolio or buy a home you won’t live in right away, this loan may not be the right fit. But for many Veterans, the goal is a safe, stable place to call home and that’s exactly what the VA loan is designed to support.

VA Funding Fee

Most VA loan borrowers must pay a one-time funding fee, which helps support the VA loan program and keeps it running for future Veterans. Some borrowers are exempt from paying this fee such as those receiving VA disability compensation or eligible surviving spouses.

The VA Funding Fee typically ranges from 1.25% to 3.3% of your loan, depending on your down payment and whether it's your first time using a VA loan benefit. For example, if you're using your benefit for the first time and putting less than 5% down on a $300,000 loan, the funding fee would be 2.15% or about $6,450.

You can roll this cost into your loan, so you don’t have to pay it upfront. However, doing so increases your total loan amount.

More: Comparing 15-Year and 30-Year VA Mortgages

15-Year VA Loan Compared to Conventional and FHA Loans

Choosing a 15-year mortgage can save you money over time, but the benefits may vary by home loan type. VA, FHA and conventional loans each come with their own rules, costs and advantages.

Before you decide, it’s helpful to understand how a 15-year VA loan compares against FHA and conventional loans side by side.

Alternative Option to a 15-Year VA Loan

If you like the idea of paying off your mortgage in 15 years but don’t want to be locked into the higher monthly payment, a 30-year VA loan with a flexible payoff strategy could be a smart alternative.

VA loans don’t have prepayment penalties, so you can pay extra toward your loan whenever it fits your budget without facing any additional fees. By making consistent extra payments or even setting up biweekly payments, some borrowers can shave years off their loan.

This approach gives you the best of both worlds: the freedom to pay off your loan faster without the pressure of committing to a shorter term. Just remember, the key is consistency. Treating your 30-year loan like a 15-year one can lead to big savings on interest and help you build equity faster, all while keeping a safety net in case life throws a curveball.

If you want to pay off a VA loan early, be sure to let your lender know that you want any extra payments applied to your principal balance. This ensures you're reducing your interest over time in the most effective way.