Down Payment Calculator
The down payment decides three things at once: your loan size, your monthly payment, and whether you pay mortgage insurance. This calculator shows the deposit amount and resulting loan from a purchase price and percentage, so you can see what each extra percentage point actually buys.
Inputs
Result
80,000
Financed amount 320,000
How the down payment calculator works
Down payment = purchase price × percentage. Loan amount = price − down payment.
Loan-to-value = loan ÷ price. Crossing below 80% LTV — that is, 20% down — is what removes private mortgage insurance on most conventional loans.
Cash needed at closing is more than the deposit: add closing costs, typically 2–5% of the price, plus prepaid escrow.
Worked example: 400,000 home at three deposit levels
- 5% down: 20,000 deposit, 380,000 loan, plus PMI of roughly 160 a month.
- 10% down: 40,000 deposit, 360,000 loan, PMI around 120 a month.
- 20% down: 80,000 deposit, 320,000 loan, no PMI.
- At 6.5% over 30 years, P&I is 2,402 / 2,275 / 2,022 respectively.
- Going from 10% to 20% costs 40,000 upfront and saves 373 a month including PMI — about 134,000 over the full term.
Common mistakes to avoid
Budgeting only for the deposit
Closing costs, moving, immediate repairs and furniture routinely add 3–6% of the price. Buyers who spend every last unit on the deposit start ownership with no reserves.
Draining the emergency fund to reach 20%
Avoiding PMI is worth money, but not at the cost of having zero buffer when a roof or a job goes. PMI can be removed later; a financial shock cannot be undone.
Assuming PMI disappears automatically
Some loans require a request once you reach 20% equity; some government-backed loans carry insurance for the whole term regardless.
Frequently asked questions
How much down payment do I need?
Conventional loans can start near 3–5%, while 20% avoids mortgage insurance. The right answer is the largest deposit that still leaves closing costs and an emergency fund intact.
What is loan-to-value?
The loan as a percentage of the property value. 20% down is an 80% LTV, which is the usual threshold for better pricing.
How much is PMI?
Typically 0.3–1.5% of the loan a year, varying with credit score and LTV. On a 360,000 loan that is roughly 90–450 a month.
Can I use gifted funds?
Most programmes allow gifts with a documented letter confirming the money is not a loan. Rules on the minimum from your own funds vary.
Is a bigger deposit better than a shorter term?
A shorter term usually saves more interest per unit of extra monthly outlay, but it locks in a higher required payment. A bigger deposit keeps flexibility.
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