The down payment is the single biggest lump sum most home buyers ever write a check for, and it shapes almost everything that follows: how big your loan is, whether you pay private mortgage insurance (PMI), what interest rate you qualify for, and how long it takes you to build real equity. This down payment calculator turns a home price into the actual cash you need at the common tiers — 3.5%, 5%, 10%, and 20% — so you can shop with a realistic budget instead of a guess.
Enter a home price, the percentage you plan to put down, the annual interest rate you have been quoted, and your loan term. The result card shows your cash up front, the loan you would take on, your starting loan-to-value ratio, whether PMI kicks in, how much more you would need to reach the 20% threshold that usually removes PMI, and — new on this page — an estimated monthly principal-and-interest payment so you can see how down payment, rate, and term pull together.
How to Use
- Type the Home Price — the amount you agree to pay the seller, not including closing costs. If you are still comparing neighborhoods, run the number on the top of your range; that is the budget ceiling that protects you.
- Set Your Down Payment as a percentage of that price. Start with whatever you have actually saved — not the percentage you wish you had.
- Enter the Annual Interest Rate you expect to qualify for (7% is a typical 30-year conforming rate as of late 2026). The rate drives the monthly payment estimate, so a half-point move changes the number by roughly $100–$150 per $100,000 borrowed.
- Pick the Loan Term — 30 years for the classic conforming mortgage, or 15 years if you want to build equity faster and qualify for a lower rate.
- Read Your Down Payment (highlighted) — that is the cash you hand over at closing on top of closing costs and prepaid escrow.
- Check the Starting Loan-to-Value line. Anything above 80% LTV means your down payment is under 20%, and lenders almost always require PMI until you climb back out.
- Look at Extra Cash to Reach 20%. If that gap feels unattainable, a low-down-payment program (FHA at 3.5%, conventional at 3–5%) is the realistic path. If it feels reachable, closing that gap often saves you hundreds of dollars a month in PMI.
- Read Estimated Monthly Payment (P&I) — this is the principal-and-interest portion only, before taxes, insurance, and PMI. It is the number to sanity-check against your monthly budget.
A useful planning rule: most lenders and advisors also want you to keep a cash reserve of two to six months of payments after closing. Do not drain every dollar into the down payment and leave yourself one furnace repair away from trouble.
The Down Payment Math
The formula is intentionally simple because the psychology around it is hard:
Down Payment = Home Price × Down Payment % Loan Amount = Home Price − Down Payment Loan-to-Value (LTV) = Loan Amount ÷ Home Price × 100
On a $400,000 home with 20% down, you bring $80,000 to the table, borrow $320,000, and start at 80% LTV — the sweet spot where PMI usually disappears. At a 7% rate over 30 years that $320,000 loan costs about $2,129 per month in principal and interest. With only 5% down on that same home, your cash is just $20,000, but you borrow $380,000 and start at 95% LTV. That extra $60,000 of loan is the difference between a strong equity cushion and being underwater if prices soften, and it also pushes the monthly payment up to roughly $2,527 at the same 7% rate.
The 20% line matters because below it, lenders protect themselves with PMI — an annual premium of roughly 0.3%–1.9% of the loan amount, added to your monthly payment, until your equity rises to 80%. On a $380,000 loan at 0.7% PMI, that is about $220 per month for years. Chasing 20% is rarely about vanity; it is often the highest-return "investment" you can make, because PMI buys you nothing.
The Down Payment Tier Ladder
Different programs set different floors, and each tier trades more cash today for lower carrying costs tomorrow:
- 3.5% down — FHA loan. The lowest widely available down payment, aimed at first-time and lower-credit buyers. It comes with both an upfront and a monthly mortgage insurance premium that is harder to remove, even after you reach 20% equity.
- 5% down — conventional 97. A common path for buyers with stronger credit. You avoid FHA's lifelong insurance but still pay PMI until you hit 80% LTV.
- 10% down. A middle ground: you skip PMI's steepest phase, build meaningful equity quickly, and only pay insurance until your balance amortizes below 80%.
- 20% down. The classic threshold. No PMI, better interest rates, lower monthly payment, and immediate protection if the market dips. It is the benchmark most buyers strive toward.
Examples
Example 1 — First-time buyer at 5%. A couple is buying a $300,000 condo and has saved $15,000 — exactly 5%. The calculator shows a $15,000 down payment, a $285,000 loan, and a 95% starting LTV, so PMI is required. To reach 20% they would need $60,000, meaning they are $45,000 short of the no-PMI line. They choose the conventional 97 program, start paying PMI, and plan to refinance or request cancellation once their balance and appreciation push them to 80%.
Example 2 — Stretching to 20%. On a $400,000 home, putting the full 20% means $80,000 down and a $320,000 loan with no PMI. But between 10% and 20% they need an extra $40,000. The calculator's "Extra Cash to Reach 20%" line makes that tradeoff concrete: is $40,000 more cash worth eliminating roughly $180–$250 per month of PMI? For many households, yes. At 7% over 30 years the monthly P&I on that $320,000 loan is about $2,129; switching to a 15-year term at the same rate pushes it up to about $2,876 but cuts the total interest paid by more than half.
Example 3 — A million-dollar home. On a $1,000,000 property, even 10% down is $100,000 cash with a $900,000 loan and 90% LTV. The 20% tier demands $200,000 up front. Running this early prevents the common mistake of falling in love with a home whose required down payment alone would empty the buyer's savings.
FAQ
How much down payment do I actually need?
It depends on the loan program. FHA loans accept as little as 3.5% down, conventional loans often start at 3–5%, and VA or USDA loans can require 0% for eligible buyers. The tradeoff is that anything under 20% usually adds private mortgage insurance. Enter your target home price here to see the exact cash at each tier.
Is 20% down really necessary?
No, but it is the most common rule of thumb. Twenty percent down removes PMI, typically earns you a better interest rate, and gives you immediate equity. If saving 20% would take years and lock you out of a rising market, a lower down payment with a plan to cancel PMI later is often the more practical choice.
What is PMI and when does it go away?
Private Mortgage Insurance protects the lender if you default, and costs roughly 0.3%–1.9% of the loan amount annually. On most conventional loans it automatically cancels when your loan-to-value reaches 78% of the original value, and you can usually request cancellation at 80%. FHA mortgages are different — their insurance often lasts the life of the loan unless you refinance.
How much should I put down if I have extra cash?
Put enough to clear the 20% PMI threshold if the gap is small, because PMI is a pure cost with no benefit to you. Beyond 20%, compare your alternative uses: paying off high-interest debt, keeping an emergency fund, or investing. There is no rule that more than 20% is always better.
Can I use gift money for the down payment?
Yes. Most loan programs allow all or part of the down payment to come as a gift from a family member, usually with a signed "gift letter" confirming it is not a loan. FHA and conventional guidelines differ on how much must be your own money depending on the down payment percentage, so confirm the rules with your lender.
Does the down payment include closing costs?
No. Closing costs — typically 2%–5% of the price for loan origination, title, taxes, and escrow — are paid separately and on top of the down payment. Budget them together: bringing 5% down on a $300,000 home means roughly $15,000 down payment plus another $6,000–$15,000 at closing.
Disclaimer
This down payment calculator is provided for informational purposes only and does not constitute financial, lending, or tax advice. Figures are estimates based on the inputs you enter; actual down payment requirements, PMI costs, and program terms vary by lender, credit profile, location, and loan type. Always confirm your required cash, loan amount, and PMI terms directly with a licensed mortgage professional or lender before committing to a purchase. © Smekys.