VA mortgage rates were cut to 12.5% from 13%.

The change, which takes effect today, reflects recent improvements in other mortgage interest rates, VA Administrator Harry N. Walters said. The reduction reversed a one-half percentage point increase made on March 25, when interest rates were headed up. The rate applies to single-family home mortgages guaranteed by the Veterans Administration. The rate on graduated payment loans dropped to 12.75%, while rates on home-improvement loans dropped to 14%. The changes will not affect interest rates on existing VA loans.