U.S. Department of Veterans Affairs
VA IRRRL recoupment calculator.
Check whether a VA streamline refinance clears the statutory net tangible benefit tests: costs recouped in 36 months or less, the required rate drop and the seasoning date.
Current and new loan
Test results
How the IRRRL tests work
Under 38 U.S.C. 3709, a VA refinance that does not increase the loan principal must pass three checks before it can be guaranteed. This tool runs each one from the numbers you enter.
| Test | Rule |
|---|---|
| Recoupment | All fees and incurred costs are scheduled to be recouped within 36 months of loan issuance, through lower regular monthly payments. Taxes, escrow amounts and VA fees paid under the chapter are excluded from the payment comparison. |
| Rate, fixed to fixed | New rate at least 50 basis points (0.50 pt) below the old rate. |
| Rate, fixed to ARM | New rate at least 200 basis points (2.00 pts) below the old rate. |
| Seasoning | Not before the later of (1) six consecutive monthly payments made on the loan being refinanced and (2) 210 days after that loan's first payment due date. |
Formula
Recoupment months = (closing costs + VA funding fee) / (current P&I payment minus new P&I payment). The funding fee uses the IRRRL rate from the same chart as our VA funding fee calculator, applied to the base loan (payoff plus any closing costs you roll in) and financed into the new loan. Payments are standard fully amortizing principal and interest. The statute sets no rate threshold for an adjustable-rate loan being refinanced, so that case shows "Not tested by the statute".
Worked example
Payoff $300,000 at 6.50% with 27 years left, refinanced to 5.75% for 27 years, with $2,500 of closing costs rolled in. Base loan $302,500; the 0.5% fee is $1,512.50, so the new loan is $304,012.50. Current P&I is $1,966.66 and new P&I is $1,849.82, a saving of $116.84 per month. Costs counted are $4,012.50, which recoup in $4,012.50 / $116.84 = 34.3 months, inside the 36-month limit. The 0.75 pt drop clears the 0.50 pt fixed-to-fixed test.
Frequently asked questions
Does the recoupment test count the funding fee?
Yes. This tool counts the funding fee along with closing costs because the statute covers fees and costs incurred in the refinance.
Can a no-cost IRRRL skip the test?
Not by this tool's reckoning. If a lender raises the rate to cover costs, enter zero costs and the new rate; the funding fee is still counted unless you are exempt.
What if I fail one test?
Ask the lender which figures it certified. Lenders may apply VA rules beyond the statute, and this tool does not model discount-point rules in section 3709(b)(4).
Is this a loan offer?
No. It is an educational estimate; your lender's figures and VA's rules control.
Sources: 38 U.S.C. 3709, Refinancing of housing loans (Cornell LII); VA.gov: Interest rate reduction refinance loan (page updated January 7, 2026); VA.gov: funding fee chart. All checked September 30, 2026.
Estimate only
This is an educational estimate, not a loan offer or financial advice. Your lender's figures control.