VA IRRRL Rate 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.
Already know a refinance makes sense and want to see how fast it pays for itself? Use the IRRRL Breakeven Calculator instead.
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 around 2%–5% of the loan depending on the lender and your state. This is separate from the VA funding fee.
A slightly higher rate can buy a lender credit that covers most costs (a “no-cost” IRRRL), lowering this toward 0% but shrinking your monthly savings. Set it to your Loan Estimate figure once you have real quotes — lowering it lowers the minimum existing rate needed.
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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, usually financed into the new balance, and excluded from the 36-month recoupment test by statute.
You're exempt (0%) if you receive VA compensation for a service-connected disability (or are entitled to it), are rated eligible via a pre-discharge exam, are an active-duty Purple Heart recipient, or a qualifying surviving spouse. Confirmed on your Certificate of Eligibility.
0.5% of loan, financed. Separate from closing costs.
The answer
If today's IRRRL APR is 6.75%, an IRRRL becomes VA-viable once your existing rate is at least
7.85%(assuming 2.0% closing costs and that you keep your current payoff schedule).
Binding test: 36-month recoupment — you need about $167/mo in P&I savings to recoup $6,000 in costs. The 0.50%/2.00% rate-drop rule alone would only require 7.25%.
At the minimum viable existing rate
Min. existing APR
7.85%
recoupment-limited
Monthly P&I savings
$167
at that rate
Lifetime savings
$54,000
over 27 years
Your current rate
Monthly P&I savings
$300
Recoupment period
20.0 mo
Lifetime savings
$97,230
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.
Wondering if you're a candidate for an IRRRL?
Gene can pull your current rate and get actual lender quotes — no obligation.
›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 the 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. Gene Richter, MLO NMLS #2806488 | PBT Bancorp NMLS #257781. Not a direct lender.