Mortgage Tools

Compare and Estimate Your Savings with a VA Hybrid Loan Calculator

Applying for a VA Hybrid Loan

It's simple to apply for a VA hybrid loan. Use this VA Hybrid Loan Calculator to get an estimate of how much money you could be saving with a VA hybrid loan, and get started now by contacting a VA loan specialist at Low VA Rates. Tell us about your current needs and we'll find the best loan for you. If you already know you want a VA hybrid loan, you can ask for one directly.

Step 1 - Current Loan Information

This is where you put the loan you're thinking about refinancing at this time. This information can be found on your note from closing.

Step 2 - New VA Hybrid Loan

This is where you set the initial term of your new VA Hybrid loan. Once set, you can then manipulate the rates beyond the ARM fixed term.

Step 3 - Add Extra Payments (Optional)

Choose whether you want to factor in additional principal, annual payments or one-time lump payments that could affect your monthly payments.

Amortization Schedule

Current Loan vs New VA Hybrid ARM Loan

  Current Loan Hybrid ARM Loan



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Monthly Payment



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What Is a VA Hybrid Loan?

A VA hybrid loan—which is sometimes called a VA hybrid ARM loan or just a VA ARM loan—starts as a low-interest, fixed-rate mortgage for a defined period of time of usually either 3, 5, 7, or 10 years. It then switches into an adjustable rate mortgage (ARM) for the remainder of the loan.

Once it switches to an ARM loan, the interest rate on your mortgage can go up or down, depending on the fluctuations of the housing market.

The attraction of a VA hybrid loan is that the interest rate can be very low during that first period—usually it's the lowest with a 3-year fixed-rate option—which gives the borrower lower monthly payments.

How Does a VA Hybrid Loan Work?

Once the hybrid loan switches to the adjustable rate period, the interest rate will change once per year.

The new rate will be determined by an index amount, such as the US prime lending rate, plus another amount, the "margin," that is determined by your lender in your mortgage contract. So, if the prime rate is 0.75% and your margin is 1.25%, then your new rate would be 2%.

One important thing for you to know is that ARM interest rates have two limits that cap how high it can go:

  1. How much the interest rate can rise per year
  2. How much it can rise over the whole life of the loan

So, for example, the rate might be capped at a 1% increase per year and a 5% total increase over the life of the loan.

Pros and Cons of VA Hybrid Loans

An advantage of VA hybrid loans is the low interest rate during the initial fixed-rate period, which is usually lower than a typical rate on a 30-year mortgage. The lower monthly payments can help you afford more or save more.

You can also apply to refinance your loan before the VA hybrid loan switches to the ARM period. Refinancing can help you to avoid those higher and changing interest rates.

A disadvantage of a VA hybrid ARM is that you may not be ready for the change in interest rate after the fixed-rate period ends. You'll need to be able to afford higher monthly payments. But unemployment or other financial changes can make that really hard—or disqualify you from refinancing.

Disclaimer, Terms, and Assumptions

The Low VA Rates VA Hybrid Simulator is a tool and is only as accurate as the data entered. The results provided by this calculator/simulation are for example only and are in no way a prediction of what will happen with your loan. This site is intended for educational purposes only and you are expected to weigh all possible outcomes before making a decision. Any rates entered on this calculator are for your education purposes only and are not guaranteed rates. Not everyone will qualify for the VA hybrid loan and additional closing costs may apply. Call and speak to a loan officer for rates and fees. VA hybrid loans have both a fixed rate feature and an adjustable rate feature. This is not a fixed rate loan and your rate can go up or down in the future. Past rate movements and volatility are not an indication of future rate movements and volatility.

© 2019 Low VA Rates, LLC. All Rights Reserved.

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