Navy Federal Mortgage Review 2020

Navy Federal mortgage rates

Note: They do not offer a 5/1 ARM, only a 5/3 ARM and a 5/5 ARM.

ProductInterest RateAPR
30-year fixed rate2.500%2.844%
15-year fixed rate2.375%2.773%
5/5 ARM rate2.250%2.333%

Think you can’t get a mortgage from Navy Federal because you’re not in the Navy? Think again. Navy Federal Credit Union serves current and former members of the United States armed forces and has a generous immediate family policy that extends to parents, children, siblings and Department of Defense civilians. As a credit union, it offers perks that may make it a superior alternative to a traditional bank.

What began as a small group of seven members in 1933 now serves its more than 9 million members in its branches in the United States and around the world. Navy Federal Credit Union’s vision is to “be the most preferred and trusted financial institution serving the military and their families.”

Why it might pique your interest

As a credit union that has very selective membership, Navy Federal is able to offer great rates with excellent benefits, including low down payments and no private mortgage insurance (PMI) required on its mortgages. You can also take advantage of Freedom Lock, which lets you lock in your new mortgage at a lower rate within 60 days of initial signing. Since its member base is small and niche, it can offer tailored financial solutions that help its members at all stages of life.

One area it shines in is its VA loans, which are backed by the Department of Veterans Affairs. It currently ranks as a top 5 VA lender in the country. Another cool perk is that if you happen to find a better rate from another lender, Navy Federal will either match that rate or give you $1,000.

If you need help deciding what kind of mortgage is right for you, its team of lending specialists helps prospective homebuyers find every possible benefit you qualify for. It also has some mortgage products that allow the seller to contribute a portion of the home’s value toward the closing costs, saving you even more money.

Navy Federal mortgage overview

Loan options:

  • VA: Available to eligible service members, veterans and their spouses, VA loans with Navy Federal don’t require a down payment, don’t require PMI and are eligible for seller contribution of up to 4%.
  • Military Choice: A fixed-rate mortgage for those who have already exhausted their VA loan benefits, down payments aren’t required with the Military Choice loan required, and these loans are eligible for up to 6% seller contribution.
  • Conventional fixed-rate: Navy Federal offers fixed-rate mortgages with terms as short as 10 years or as long as 30 years. These require a down payment of at least 5%. Refinance options are available if you already have a mortgage. 
  • Homebuyers Choice: Perfect for those who don’t want to wait until they have a down payment, the Homebuyers Choice loan offers the stability of consistent monthly payments. No down payment is needed, and this loan is eligible for a seller contribution of up to 6%.
  • Adjustable Rate Mortgage (ARM): Navy Federal offers 5/3 and 5/5 ARMs to customers. These come with a low, fixed interest rate for the first five years before the adjustable term kicks in.

Pros and cons


  • Freedom Lock — This can lower your interest rate if rates drop. This program lets you switch to a better interest rate if the market takes a plunge within 60 days. You can do this up to two times during the life of their mortgage, and you can save up to 0.50%, which can add up to quite a lot of extra cash over the years.
  • Rate match guarantee — With the rate match guarantee, if you find a better interest rate with a competitor, just bring it to your personal banker at Navy Federal and the rate will be matched. If NFCU cannot match the rate you’ll receive $1,000.
  • Expert home loan advisors — These advisors help you get the best loan possible. As a top-five VA lender, Navy Federal home loan advisors are very knowledgeable about programs that benefit its customers. 
  • All-in-one homebuying resource — Navy Federal has a network of trusted real estate agents available to you, and when it’s time to close, you can get title insurance through its title company. Not sure about the homebuying process? Its website has a whole section devoted to mortgage education.
  • No PMI requirement — Navy Federal doesn’t require private mortgage insurance (PMI). 


  • Closed membership — Membership with Navy Federal is not open to everyone. Navy Federal membership is limited to those who are active duty or retired armed forces and their immediate family members, as well as civilian employees of the Department of Defense. Fortunately, it is quite liberal in its definition of family members, so the qualified candidates include grandparents, parents, siblings, children and grandchildren.
  • Potential for higher monthly payments — The no down payment option may become a burden to new homeowners. At first glance, a 0% down payment mortgage sounds great, especially for those anxious to buy who do not have savings for a down payment. The downside is that without a down payment, you will have a higher monthly payment.


Is Navy Federal good for mortgages? 

Yes, although Navy Federal Credit Union’s mortgage services are limited to military members, veterans and their families. If you fall under one of the categories of people who qualify, Navy Federal is one of the top mortgage providers you can utilize.This lender offers VA refinance loans, conventional fixed loans and VA loans for homebuyers, neither of which require a down payment. For its conventional mortgages, buyers only need to put down 5%.

Navy Federal loans also include several special features to make their mortgages extra appealing to borrowers. For instance, its Freedom Lock program lets members lock in their interest rates, which means they won’t have to pay more if rates rise. If rates decrease, customers have the opportunity to lock in the new, lower rate.

How long does it take Navy Federal to approve a mortgage?

Once you’ve submitted all of the necessary paperwork, it will take about 30 days to get your mortgage with Navy Federal. Here’s a brief overview of the process:

  1. Get preapproved. At this early stage, Navy Federal will issue you a preapproval letter, which states how much money you’re approved to borrow to buy your home.
  2. Find a home. Next, you’ll narrow down your search to find the perfect home. 
  3. Submit your application. During this phase, you’ll submit all of the required documentation and order an appraisal of the home.
  4. Close and assume ownership. Finally, if everything is approved, you’ll assume ownership of the property and have your loan funded.

What credit score does Navy Federal use for mortgages?

If you’re applying for a VA loan through Navy Federal, there is no minimum credit score required. If you’re interested in one of their other conventional mortgage loans, you’ll need to get in touch with a representative to find out what credit score you’ll need to qualify. When evaluating applicants, Navy Federal also considers their banking histories as well as their credit scores, so you could earn points for approval if you’ve got a strong track record with the banking side of NFCU.

The final word

Current and former military members who are looking for a mortgage, be it a VA, conventional fixed-rate or adjustable-rate mortgage should consider membership with Navy Federal. In addition to these mortgage products, Navy Federal Credit Union offers a wide array of other financial products, including checking and savings, personal loans, auto loans, credit cards and retirement savings accounts.

Charlotte Edwards

Contributing Finance Writer

Charlotte Edwards is an educator-turned-freelance writer based in Beijing, China. She writes personal finance and parenting content for both digital and print publications around the world. You will find her work on sites including The Penny Hoarder, Money Under 30, Work and Money, Incomes Abroad, Hawaii Parent and Tianjin Today. When not writing, you can find her spending time with her husband and two kids, or using her education degree to teach English as a Second Language.