Down Payment Calculator

About the Down Payment Calculator

A down payment calculator works out how much cash you need upfront to buy a home, based on the purchase price and your chosen down payment percentage, and shows how that decision ripples through the rest of your mortgage. The down payment is the most consequential number in a home purchase after the price itself: it determines your loan amount, whether you'll pay costly mortgage insurance, the interest rate lenders offer you, and how much home you can realistically afford. The classic benchmark is 20% — putting down a fifth of the price — because at that level most US lenders waive private mortgage insurance (PMI), a monthly premium that can add hundreds of dollars with no benefit to you. But 20% is not a legal requirement, and millions of buyers use low-down-payment programmes: FHA loans allow as little as 3.5% down, conventional loans can go to 3%, and VA and USDA loans permit qualified buyers to put down nothing at all. Our calculator lets you test different percentages against any price, revealing the trade-off between a smaller upfront cost and larger long-term expense.

How It Works

The down payment is the purchase price multiplied by the down payment percentage, and the loan amount is simply the price minus the down payment. From there the consequences cascade. A larger down payment reduces the loan, which lowers both the monthly payment and the total interest paid over the life of the loan — often by tens of thousands of dollars. Crossing the 20% threshold on a conventional loan eliminates PMI, which is typically 0.5% to 1.5% of the loan amount per year until you build 20% equity. Lenders also view larger down payments as lower risk and frequently reward them with slightly better interest rates. Working out the required cash means going beyond the down payment alone: closing costs (usually 2-5% of the price for lender fees, title, appraisal, and taxes) must be paid at the same time, so the true cash-to-close is the down payment plus those costs, minus any seller concessions or lender credits. Our calculator focuses on the down payment and loan figures so you can see instantly how each percentage point of down payment changes what you borrow.

Tips & Best Practices

• ✓20% down is the key threshold on conventional loans: it eliminates private mortgage insurance (PMI), which can cost hundreds of dollars a month and provides no benefit to you as the borrower.
• ✓You don't need 20% to buy. FHA loans require just 3.5% down, conventional loans go as low as 3%, and VA and USDA loans allow $0 down for eligible buyers — but expect mortgage insurance with the low-down options.
• ✓Budget for closing costs on top of the down payment. They typically run 2-5% of the purchase price and are due at the same time, so your true cash needed is meaningfully higher than the down payment alone.
• ✓A larger down payment lowers both your monthly payment and your total interest, often by tens of thousands over the loan. But weigh that against keeping cash for emergencies and other investments.
• ✓Once you reach 20% equity through payments or appreciation, you can request PMI cancellation on a conventional loan — you don't have to wait for it to drop automatically at 22%.
• ✓Down payment gift funds from family are allowed on most loan types, but lenders require a documented gift letter and a paper trail showing the funds' source, so plan the transfer well before closing.
• ✓In a fast-appreciating market, a smaller down payment that gets you in sooner can outperform waiting years to save 20%, because home price growth may outpace your savings. Run both scenarios before deciding.
• ✓Keep a cash reserve after closing. Draining every dollar into the down payment leaves you exposed to the immediate costs of homeownership — repairs, moving, and furnishing all arrive at once.

Who Uses This Calculator

First-time buyers use a down payment calculator to set a realistic savings goal — knowing that 20% on a $400,000 home is $80,000 while an FHA 3.5% down payment is $14,000 completely reshapes the timeline for buying. Buyers weighing low-down-payment loans use it to see the trade-off: a smaller down payment gets them into a home sooner but means a bigger loan, PMI, and more interest over time. Move-up buyers use it to calculate how much equity from selling their current home can go toward the next one. Anyone comparing loan programmes (conventional, FHA, VA, USDA) uses it to model how each programme's minimum down payment affects their loan and monthly cost. Parents helping children with a gift toward a down payment use it to size the gift needed to reach the PMI-free 20% threshold. Financial planners use it to help clients decide whether to stretch for 20% or invest the difference, since in some markets the return on invested cash can exceed the cost of PMI. Buyers negotiating with sellers use it alongside closing-cost estimates to understand their total cash-to-close.