Down Payment Calculator
Essential down payment calculator for home buyers and mortgage planning. Calculate required down payments, monthly payments, PMI costs, and total costs for different down payment scenarios. Perfect for understanding how different down payment amounts affect your mortgage costs and monthly payments. Features detailed comparisons of 10%, 15%, and 20% down payments, PMI calculations, and loan-to-value ratios. Includes explanations of mortgage concepts like PMI requirements, escrow, and the benefits of larger down payments. Essential for making informed decisions about home purchases and mortgage financing.
Down Payment Calculator
Down Payment Analysis
Purchase Details
Monthly Payments
Cost Analysis
Down Payment Scenarios
What Is a Down Payment Calculator?
A down payment calculator shows how different down payment amounts affect your mortgage loan size, monthly payment, PMI cost, and total cash needed to close. It's the first financial tool to use before shopping for a home — because the down payment percentage determines whether you pay PMI, your loan-to-value ratio, and often your interest rate tier.
Down payment options range from 0% (VA and USDA loans) to 3% (conventional with PMI), 3.5% (FHA), 10%, and 20% (no PMI). Each percentage triggers different loan program eligibility, mortgage insurance rules, and monthly costs. The calculator shows the exact tradeoff for any scenario you enter.
Use it alongside the home affordability calculator and the mortgage calculator to build a complete picture before making an offer.
How to Use This Down Payment Calculator
- Enter the home purchase price.
- Enter your down payment amount in dollars or as a percentage — the calculator converts between the two automatically.
- Enter the interest rate and loan term.
- Include estimated property taxes, homeowners insurance, and HOA fees for a full PITI payment estimate.
- The results show loan amount, monthly P&I, PMI cost (if applicable), total PITI, and cash to close including estimated closing costs.
- Adjust the down payment slider to compare scenarios side by side.
Worked Example: Alex's $400,000 Home
Alex is buying a $400,000 home with a 30-year fixed mortgage at 7.0% APR. Property taxes: $375/month. Insurance: $125/month. Here's how three common down payment amounts compare:
| Down Payment | Cash Down | Loan Amount | Monthly P&I | PMI/mo | Total PITI |
|---|---|---|---|---|---|
| 3.5% (FHA) | $14,000 | $386,000 | $2,568 | $275 | $3,343 |
| 10% | $40,000 | $360,000 | $2,395 | $180 | $3,075 |
| 20% | $80,000 | $320,000 | $2,129 | $0 | $2,629 |
The 20% down payment saves Alex $714/month vs. 3.5% FHA. Over 5 years: $42,840 in savings. The extra $66,000 upfront earns itself back in under 8 years — not counting PMI cancellation timing.
Down Payment Reference Table — $350,000 Home at 7%
| % | Amount | Loan | Monthly P&I | PMI/mo | Loan Program |
|---|---|---|---|---|---|
| 0% | $0 | $350,000 | $2,329 | Funding fee | VA / USDA only |
| 3% | $10,500 | $339,500 | $2,260 | ~$255 | Conventional (Fannie/Freddie) |
| 3.5% | $12,250 | $337,750 | $2,248 | ~$238 MIP | FHA |
| 10% | $35,000 | $315,000 | $2,096 | ~$131 | Conventional |
| 15% | $52,500 | $297,500 | $1,980 | ~$62 | Conventional |
| 20% | $70,000 | $280,000 | $1,863 | $0 | Conventional (no PMI) |
Key Concepts: PMI, LTV, MIP, and Loan Program Thresholds
PMI (Private Mortgage Insurance) — Required on conventional loans when your down payment is below 20%. Cost: 0.5–1.5% of the loan per year, paid monthly. It protects the lender, not you. PMI cancels automatically at 78% LTV (or you can request removal at 80%). On a $350,000 loan at 0.85%, that's $248/month you stop paying once you hit 20% equity.
FHA MIP (Mortgage Insurance Premium) — FHA loans charge upfront MIP (1.75% of the loan, rolled into the loan) plus annual MIP (0.55–0.85% of the loan). Unlike PMI, FHA MIP now lasts the life of the loan if your down payment was under 10%. This is a major cost that many first-time buyers underestimate.
LTV (Loan-to-Value) — Loan amount ÷ home value. A 10% down payment = 90% LTV. Lenders use LTV to price risk: every 5% of LTV reduction typically lowers your rate by 0.125–0.25%.
Cash to close — Down payment + closing costs (2–5% of purchase price) + prepaid items (first year insurance, 2–3 months of property taxes, prepaid interest). On a $400,000 home with 10% down, total cash to close is typically $55,000–$65,000, not just the $40,000 down payment.
Tips and Common Mistakes
- Draining savings for 20% down — Putting every dollar into the down payment to avoid PMI can leave you with no emergency fund. A 10% down payment with 6 months of reserves is safer than 20% down with nothing left.
- Forgetting closing costs — Many buyers budget only for the down payment. Closing costs run 2–5% of the purchase price — another $8,000–$20,000 on a $400,000 home.
- Not comparing FHA vs. conventional — FHA's lifetime MIP often makes conventional with PMI cheaper over 5+ years, especially for buyers with 680+ credit scores. Run both scenarios.
- Ignoring gift funds — Down payment gifts from family members are allowed on most loan programs (with documentation). If relatives can contribute, a 20% down payment becomes more achievable.
- Overlooking down payment assistance programs — Many states and counties offer DPA grants or low-interest second loans for first-time buyers, sometimes covering 3–5% of the purchase price. Check your state housing finance agency before assuming you must fund the full down payment yourself.
Frequently Asked Questions
How much down payment do I need to buy a house?
Minimum is 0% for VA/USDA loans, 3% for conventional (Fannie Mae HomeReady), 3.5% for FHA. Most lenders require at least 5% for a standard conventional loan. 20% eliminates PMI.
Is 20% down payment necessary?
No. It eliminates PMI, which saves $100–$300/month, but it's not required. Many buyers use 5–10% down and cancel PMI once they reach 20% equity through payments and appreciation.
When does PMI go away?
On conventional loans, PMI cancels automatically when your balance reaches 78% of the original purchase price. You can request cancellation at 80% LTV. On FHA loans originated after June 2013 with less than 10% down, MIP lasts the life of the loan.
How does down payment affect my interest rate?
Larger down payments often qualify for better rate pricing tiers. The difference between 5% and 20% down can be 0.25–0.5% on the rate, worth $40–$80/month on a $350,000 loan.
What is the minimum down payment for a conventional loan?
3% for first-time buyers through Fannie Mae's HomeReady or Freddie Mac's Home Possible programs. Otherwise, 5% is the standard minimum for a conventional loan.
Can I use gift money for a down payment?
Yes — on most loan programs. FHA allows 100% of the down payment to be gifted. Conventional loans allow gift funds as long as the donor is a relative. A gift letter documenting the source is required.
Should I put more down or invest the difference?
If the stock market returns 8–10% and your mortgage rate is 7%, the math slightly favors investing. But the guaranteed PMI elimination and lower payment from a larger down payment has risk-free value. The right answer depends on your risk tolerance and how long you plan to stay.
What related tools should I use?
Use the mortgage calculator to see your full payment, the home affordability calculator to find your price ceiling, or the rent vs buy calculator to compare options.