Residential · Calculator
VA IRRRL Calculator
The VA streamline refinance, by the numbers: monthly savings, the 0.5% funding fee, the full closing-cost build-up, and the two tests the VA requires before the loan can close. Have an FHA loan instead? Use the FHA Streamline calculator.
Current VA Loan
New Loan
Payoff Items
Per-diem to closing date.
Statement, recording, etc.
Closing Costs
Lender admin / underwriting / processing.
Negative = lender credit.
New Escrow Setup
Months held in new escrow.
Monthly Savings (P&I)
$213.15
Recoup 13.7 months (closing + funding fee)
Current vs New
Current
$3,306.85/mo
6.5% · $523,180
Total $3,457.85 w/ tax+ins
New
$3,093.70/mo
5.75% · $530,132
Total $3,244.70 w/ tax+ins
Payoff Build-Up
Costs Added to New Loan
Recoup
VA net tangible benefit tests
Recoupment counts closing costs less lender credits; the funding fee, prepaid interest and escrow deposits are excluded. The rate test is for fixed-to-fixed; a fixed-to-ARM IRRRL needs a 2-point reduction.
The 36-month recoupment test
Since 2019, federal law (38 U.S.C. § 3709) has required the lender to certify that a VA IRRRL pays for itself within 36 months. The test is one division:
Must be 36 or less
Recoupable costs are the lender, title, recording and third-party fees, plus any discount points, minus any lender credit. Three things are left out: the funding fee, prepaid interest, and the money deposited to start the new escrow account. The denominator is the drop in principal and interest only, not the drop in the total payment.
| Recoupable costs | Monthly P&I reduction | Recoupment | Result |
|---|---|---|---|
| $3,000 | $100 | 30 months | Pass |
| $3,000 | $75 | 40 months | Fail |
| $4,500 | $125 | 36 months | Pass |
| $0 (lender credit covers the costs) | $60 | 0 months | Pass |
The calculator above runs this test on your numbers and shows the pass or fail beside the cash-cost and all-in break-even figures. A failing test is not the end: a lender credit, fewer points or a lower cost structure can bring it under 36 months.
The rate-reduction test
The same statute sets a minimum drop in rate. For the usual case, a fixed-rate VA loan refinanced into another fixed rate, the new rate must be at least 0.5 percentage points lower. Fixed into adjustable requires a 2-point drop. Adjustable into fixed has no minimum, because locking the rate is itself the benefit.
Both tests are independent. A loan that drops the rate by a full point still fails if the costs take 40 months to earn back, and a loan with tiny costs still fails if the rate only drops a quarter point.
What the IRRRL costs
The VA funding fee on an IRRRL is 0.5% of the loan amount, regardless of whether this is the first or a later use of the benefit, and it is waived for veterans with a service-connected disability rating. Everything else is ordinary refinance cost: lender fees, title and settlement, recording, prepaid interest for the days between funding and the first payment, and the deposit that opens the new escrow account. The old escrow balance comes back to you after the payoff, or can be netted against it.
All of it can be financed. The VA does not require an appraisal on most IRRRLs, and there is no income or credit re-qualification unless the payment goes up by 20% or more. Veterans buying or refinancing again with partial entitlement should also check the VA entitlement calculator; an IRRRL does not change entitlement, but a later purchase will. The full program is covered on the VA loan guide.
Frequently asked
About this calculator.
What is a VA IRRRL?
IRRRL stands for Interest Rate Reduction Refinance Loan, the VA’s streamline refinance for borrowers who already have a VA loan. No appraisal in most cases, no income documentation, and a funding fee of 0.5% instead of the 2.15% or 3.30% charged on a purchase. It must lower the rate or move an adjustable loan to a fixed rate.
Is a VA IRRRL the same as a VA streamline refinance?
Yes. “VA IRRRL,” “VA streamline refinance,” and “VA streamline” all mean the Interest Rate Reduction Refinance Loan. IRRRL is the VA’s name for it; streamline is the industry’s name for the reduced paperwork. This calculator is the same tool under either name.
What is the 36-month recoupment rule on a VA IRRRL?
Under 38 U.S.C. § 3709, the lender must certify that the fees and costs of the refinance will be recouped from the reduction in the monthly principal and interest payment within 36 months. The funding fee, prepaid interest and escrow deposits are left out of the costs, and lender credits reduce them. Costs of $3,000 against a $100 monthly reduction recoup in 30 months and pass; the same costs against $75 a month take 40 months and fail.
How much is the VA IRRRL funding fee?
0.5% of the loan amount, and it can be financed into the new loan. Veterans receiving VA disability compensation, surviving spouses of veterans who died in service or from a service-connected disability, and Purple Heart recipients on active duty are exempt. The exemption shows on the Certificate of Eligibility.
How much does the rate have to drop on a VA IRRRL?
For a fixed-rate loan refinanced into another fixed-rate loan, the new rate must be at least 0.5 percentage points lower. Refinancing a fixed-rate loan into an adjustable-rate loan requires a reduction of at least 2 points. Refinancing an adjustable loan into a fixed rate has no minimum reduction. Both the recoupment test and the rate test have to pass.
Can I roll the closing costs into a VA IRRRL?
Yes. The VA allows the closing costs, the funding fee and up to two discount points to be financed into the new loan, so many veterans close with nothing out of pocket. The recoupment test still applies to those costs, and financing them raises the balance, so the calculator shows both the break-even on cash costs and on everything financed.
IRRRLs close fast
Send the statement. We run both tests.
A VA IRRRL skips the appraisal and the income file, so the whole decision comes down to the numbers above. Send us your most recent mortgage statement and we will quote it against today's rate sheet, with the recoupment math on the quote.
Prefer to talk first? Call (305) 703-9001