See what a VA Interest Rate Reduction Refinance Loan would save each month, its 0.5% funding fee, and whether it passes VA's 36-month recoupment test.
Rates here are editable examples, not today's rates. Use the rate from your own quote or Loan Estimate.
Estimates for planning, not financial, tax or legal advice. Figures use US rules unless the page says otherwise.
What is the IRRRL?
The Interest Rate Reduction Refinance Loan (IRRRL), often called a VA streamline, replaces a VA-backed loan you already have with a new VA loan, usually at a lower rate. You must be refinancing an existing VA loan and certify that you live in the home or used to. Closing costs can be added to the new loan.
The rules this page checks
- Recoupment: the fees and closing costs must be scheduled to be paid back through lower monthly payments within 36 months. Taxes, escrow amounts and the VA funding fee aren't counted.
- Rate drop: fixed to fixed, the new rate must be at least 0.5 percentage points lower. Fixed to adjustable, at least 2 points lower.
- Seasoning (not checked here): you must have made six monthly payments in a row on the current loan, and it must be at least 210 days since its first payment was due.
How it's calculated
Funding fee = 0.5% × (balance + financed closing costs)
New loan = balance + financed closing costs + funding fee
Recoupment months = closing costs ÷ (old payment − new payment)
Payments are principal and interest only. The current payment comes from your balance, rate and years left, or from your statement if you type it in.
Worked example
You owe $280,000 at 6.75% with 27 years left, so you pay $1,880.48 a month. A 30-year IRRRL at 6% with $4,000 of closing costs added: the fee is 0.5% × $284,000 = $1,420, and the new loan is $285,420. The new payment is $1,711.24, saving $169.24 a month. $4,000 ÷ $169.24 = 23.6, so costs are recouped in 24 months, inside the 36-month limit.
Limitations
- A longer new term lowers the payment but can raise total interest. Compare the interest lines in the result.
- Lender credits reduce the costs to recoup. Enter costs after credits.
- Your lender makes the official recoupment certification and must give you a loan comparison.
Sources
How we checked this
Before every update, this calculator is run in a real browser with these known answers, and it must match all of them:
- $280,000 at 6.75%, 27 years left, to 6% for 30: new payment $1,711.24 ✓
- Same: funding fee $1,420.00 ✓
- Same: $4,000 recouped in 24 months ✓
- $9,000 costs, 7% to 6.25% over 20 years: 588 months, fails ✓
- Rate cut of 0.25 points fixed to fixed: fails the rate test ✓
Last checked October 26, 2026. Spotted something wrong? The math is done in your browser with the formula shown on this page, so you can check any result by hand.
Questions people ask
What is the IRRRL?
It's VA's Interest Rate Reduction Refinance Loan: a refinance of an existing VA-backed loan into a new one, usually at a lower rate, with the closing costs allowed in the new loan.
What is the funding fee on a VA IRRRL?
0.5% of the loan amount, unless you're exempt, for example because you get VA disability compensation.
What is the 36-month recoupment rule?
The closing costs, fees and expenses of the refinance must be paid back through the lower monthly payment within 36 months. Divide the costs by the monthly savings. The funding fee, taxes and escrow aren't counted.
How much does my rate need to drop for an IRRRL?
At least 0.5 percentage points if both loans are fixed rate, and at least 2 points if you move from a fixed rate to an adjustable rate.