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Down Payment Calculator

Calculate down payment requirements for home purchase.

Compare 3%, 5%, 10%, and 20% down payment options.

Free mortgage down payment calculator.

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Loan Amount
$0.00
Down Payment Percentage
0.0%
Loan-to-Value (LTV) Ratio
0.0%
Monthly Payment (Principal & Interest)
$0.00
PMI Required? (if LTV > 80%)
0%
Estimated Monthly PMI
$0.00
Total Monthly Payment (with PMI)
$0.00
Total Interest Over Life of Loan
$0.00

Down Payment vs Loan Amount

Down Payment (Your Cash)$70000.00
Loan Amount (Borrowed)$0.00

Why 20% Down is the Goal

20% down payment avoids PMI (Private Mortgage Insurance), gets you better interest rates, lowers monthly payments, and builds instant equity.

On a $350,000 home, that's $70,000 down.

Result: No PMI ($200-300/month savings), lower monthly payment, and you start with $70,000 equity instead of almost nothing.

Down Payment Minimums by Loan Type

Conventional: 3-5% minimum (PMI required under 20%)

• FHA: 3.5% minimum (580+ credit) or 10% (500-579 credit)

• VA: 0% minimum (eligible veterans, no PMI ever)

• USDA: 0% minimum (eligible rural properties)

• Jumbo: Often 10-20% minimum. Choose loan type based on your down payment amount and situation.

What is PMI?

PMI (Private Mortgage Insurance) protects the lender if you default.

Required for conventional loans with less than 20% down.

Cost: 0.5-1.5% of loan amount annually ($50-350/month typical).

Automatically removed at 78% LTV or when you request it at 80% LTV.

Not tax deductible (in most cases).

Adds thousands to your total cost.

How Down Payment Affects Monthly Payment

Every $10,000 in down payment saves you roughly $60-75/month in principal and interest (at 7% rate, 30-year term).

On a $350,000 home: 3% down ($10,500) = $2,260/month.

10% down ($35,000) = $2,100/month.

20% down ($70,000) = $1,863/month.

Plus PMI savings of $200-300/month.

Total difference: $400-700/month!

Don't Forget Closing Costs

⚠️ Budget an additional 3-5% of purchase price for closing costs (separate from down payment).

On a $350,000 home: $10,500-17,500 in closing costs.

These include: appraisal, inspection, title insurance, lender fees, prepaid property taxes, escrow setup.

You need down payment PLUS closing costs in cash.

First-Time Homebuyer Programs

Many programs help with down payments: FHA loans (3.5% down), state/local down payment assistance grants (up to $15,000), IRA withdrawal ($10,000 penalty-free for first home), gift from family (must be documented).

Explore all options before assuming you need 20% down.

Many buyers start with 3-10% down.

Larger Down Payment vs Investment

Tradeoff: Put 20% down to avoid PMI vs put 10% down and invest the difference.

Example: $350K home.

Option A: $70K down (20%), no PMI, lower payment.

Option B: $35K down (10%), pay PMI, invest the other $35K.

If investments earn 8-10% annually, Option B might win long-term despite PMI cost.

Run the numbers for your situation.

How Much Should You Actually Put Down?

Minimum for most: 20% to avoid PMI if possible.

Exception: Put less down if (1) You can earn more investing the difference, (2) You need cash reserves for emergencies, (3) Home prices are rising fast (better to buy now with less down than wait), (4) Interest rates are rising (lock in rate now).

Balance PMI cost against opportunity cost of cash.

Sources & References

Consumer Financial Protection Bureau - Down Payments
https://www.consumerfinance.gov/owning-a-home/prepare/
Fannie Mae - HomeReady Loan (Low Down Payment)
https://singlefamily.fanniemae.com/originating-underwriting/mortgage-products/homeready-mortgage
FHA Loan Limits and Requirements
https://www.hud.gov/buying/loans

Understanding Down Payments on Home Purchases

A down payment is the upfront cash payment you make when purchasing a home, representing your initial equity stake in the property.

It's expressed as a percentage of the purchase price: on a $400,000 home, a 20% down payment is $80,000.

The down payment amount significantly impacts your mortgage terms, monthly payments, and total costs.

Traditional wisdom recommends 20% down for several reasons: it avoids Private Mortgage Insurance (PMI), which costs 0.3-1.5% of loan amount annually ($75-$375/month on a $300,000 loan); it demonstrates financial stability to lenders, qualifying you for better interest rates (often 0.25-0.5% lower than smaller down payments); it provides equity buffer against market declines; and it results in lower monthly payments and less total interest paid.

However, many buyers successfully purchase with less: FHA loans require just 3.5% down but include mandatory mortgage insurance; conventional loans now offer options as low as 3% down for qualified buyers; VA loans (for veterans) and USDA loans (for rural properties) offer 0% down options.

The tradeoff with smaller down payments is higher monthly costs: on a $400,000 home, 3% down ($12,000) versus 20% down ($80,000) results in approximately $400-600 higher monthly payments due to larger loan amount, PMI, and potentially higher interest rates.

Over 30 years, this costs $150,000-200,000 more.

However, for many buyers, saving an extra $68,000 to reach 20% down takes 3-5+ years, during which home prices might appreciate 15-30%, offsetting the savings from larger down payment.

The optimal down payment depends on your financial situation, local market conditions, and opportunity cost of the funds.

Calculate the break-even point between waiting to save more versus buying sooner with less down.

Strategies for Saving Your Down Payment

Accumulating a down payment requires disciplined saving and strategic planning.

First, set a specific target: determine your target home price range, calculate required down payment (typically 3-20%), add closing costs (2-5% of purchase price), and include moving expenses and initial repairs/furnishings.

For a $400,000 home with 10% down, total cash needed is approximately $55,000-65,000 ($40,000 down + $8,000-12,000 closing + $7,000-13,000 reserves).

Create a timeline: divide total needed by monthly savings capacity.

To save $50,000 in 3 years requires $1,390/month.

Accelerate savings through automatic transfers (pay yourself first before discretionary spending), high-yield savings accounts (earning 4-5% versus 0.01% in regular savings adds $3,000-4,000 on $50,000 over 3 years), side income dedicated entirely to down payment fund, and tax refunds, bonuses, or windfalls directed to savings.

Explore down payment assistance programs: many states and cities offer grants or low-interest loans to first-time buyers (typically $3,000-15,000); employers sometimes provide homebuyer assistance; and some nonprofits offer matched savings programs.

Consider alternative funding sources: gifts from family (must be documented with gift letters), retirement account withdrawals (first-time homebuyers can withdraw $10,000 from IRA penalty-free, though subject to taxes), and employer relocation assistance.

Balance opportunity cost: if you can earn 8-10% investing versus 4-5% in savings, but need funds in 1-2 years, safety trumps returns.

For 5+ year timelines, consider investing 50-70% in conservative portfolios.

Avoid common mistakes: don't drain emergency funds (maintain 3-6 months expenses separate from down payment), don't take on new debt before mortgage application (impacts qualification), and don't forget closing costs and post-purchase reserves (lenders want 2-6 months of payments in reserves).

Start early, save consistently, and adjust your target home price if needed to reach homeownership sooner.

Key Financial Terms

Understand the essential concepts behind this calculator

Down Payment

The initial cash payment made when purchasing a vehicle, reducing the amount you need to finance.

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View all financial terms in our glossary →

Frequently Asked Questions

Common questions about the Down Payment Calculator

A down payment is the amount of money you pay upfront when buying a home. It reduces the total loan amount and shows lenders that you are serious about your purchase.
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Average Down Payment Statistics

In 2024, the median down payment for first-time homebuyers was 8%, while repeat buyers put down 19%. Only 34% of buyers made the traditional 20% down payment.
→Source: National Association of Realtors - Home Buyer Profile(2024)

PMI Costs and Removal

Private Mortgage Insurance typically costs 0.5-1.5% of loan amount annually and can be removed once you reach 20% equity through payments or appreciation.
→Source: Consumer Financial Protection Bureau - Private Mortgage Insurance(2024)