Down Payment Calculator
Calculate how much you need for a down payment and see how it affects your monthly mortgage.
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About the Down Payment Calculator
The down payment is the cash you bring to closing. It determines whether you pay mortgage insurance, what rate you qualify for, how much house you can afford, and how much equity cushion you have on day one. This page walks through the trade-offs between 3%, 10%, 20%, and beyond.
The Formula
Down payment $ = Home price × (Down %). Loan amount = Home price − Down payment. PMI applies when down payment is below 20% of home price.
Worked Example
$400,000 home: 3.5% down = $14,000 loan $386,000 (FHA, with mortgage insurance). 10% down = $40,000 loan $360,000 (conventional with PMI). 20% down = $80,000 loan $320,000 (no PMI). 25% down = $100,000 loan $300,000 (best rate tier at most lenders).
The PMI threshold at 20%
Conventional loans require Private Mortgage Insurance when your down payment is below 20%. PMI costs roughly 0.3% to 1.5% of the loan annually — for a $400,000 home with 10% down, that's $1,200-6,000/year. PMI cancels automatically when your loan balance hits 78% of original value, or you can request it at 80%.
3% conventional vs 3.5% FHA
Conventional 3% down loans (Fannie HomeReady, Freddie HomePossible) are cheaper long-term than FHA — PMI cancels once you hit 20% equity. FHA mortgage insurance lasts the life of the loan if your down payment is under 10%. For credit scores 680+, conventional 3% is almost always better than FHA.
Should you put down more than 20%?
Each extra dollar of down payment 'earns' the interest rate on your mortgage — so 6.75% guaranteed. That's a strong return. But it locks money in an illiquid asset. The right answer depends on whether you have a fully-funded emergency fund (3-6 months expenses) and are maxing tax-advantaged retirement accounts.
Common Mistakes
- Draining your emergency fund to hit 20% down. Better to pay PMI for a few years than be one job loss away from disaster.
- Treating gift funds carelessly — lenders require a paper trail and a gift letter from the donor.
- Forgetting closing costs need separate cash (2-4% of the home price), not just the down payment.
Frequently Asked Questions
Can I borrow my down payment?
Most loan programs prohibit borrowed down payments. 401(k) loans and HELOC against another property are exceptions but they affect your DTI.
What if I have no down payment?
VA loans (for eligible veterans) and USDA loans (rural areas, income-limited) offer 0% down. State and local first-time-buyer programs sometimes provide down payment assistance.
This calculator is for informational purposes only and does not constitute financial, tax, or legal advice. Consult a licensed professional before making significant financial decisions.