Down Payment Calculator
Calculate your down payment amount, loan size, and estimated PMI costs. Use the percentage slider or enter a dollar amount — both fields update each other automatically.
| Down % | Down Amount | Loan Amount | Monthly PMI | Total PMI Paid |
|---|
What is a Down Payment?
A down payment is the initial cash payment made by a buyer at the time of purchase, representing a percentage of the total asset price. In real estate, it is the portion of the home's purchase price paid out of pocket — with the remainder financed through a mortgage loan. A higher down payment reduces the loan amount, lowers monthly payments, and often secures a better interest rate from the lender.
Down payment requirements vary by mortgage product. Conventional loans backed by Fannie Mae and Freddie Mac require as little as 3% for first-time buyers, while the traditional recommendation is 20% — the threshold that eliminates Private Mortgage Insurance (PMI). FHA loans accept as little as 3.5% down, while VA loans (for veterans) and USDA loans (for rural properties) offer zero down payment to qualifying borrowers.
The decision of how much to put down involves real trade-offs. A larger down payment reduces monthly costs and total interest paid over the loan life but ties up liquidity that could otherwise be invested or held as an emergency reserve. Many financial planners recommend 20% where possible to avoid PMI while retaining 3–6 months of expenses as a separate emergency fund. The right down payment depends on income stability, savings rate, and local housing market conditions.
PMI Cost Formula
PMI rates vary by lender, credit score, and loan type. The 0.5% annual rate used here is a conservative estimate. Your actual PMI may be higher. PMI is automatically cancelled once your loan balance drops to 78% of the original home value on conforming loans.
How to Use the Down Payment Calculator
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1Enter the Home PriceType the purchase price of the home you are considering. All calculations are based on this figure.
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2Set Your Down PaymentUse the slider, click a quick-select preset (3%, 5%, 10%, 20%), or type a dollar amount directly. The percentage and dollar fields stay in sync automatically.
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3Review Your Key NumbersSee your down payment amount, loan amount, and estimated monthly PMI. If your down payment is 20% or more, no PMI is required.
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4Compare ScenariosThe comparison table shows all four standard down payment amounts side by side so you can weigh the tradeoffs at a glance.
Example Calculation
Home price $400,000 with a 10% down payment:
Frequently Asked Questions
The minimum down payment depends on the loan type. Conventional loans require as little as 3% for first-time buyers. FHA loans require 3.5% with a credit score of 580+. VA and USDA loans offer 0% down for eligible borrowers. Jumbo loans typically require 10–20%. A larger down payment generally qualifies you for better interest rates and avoids PMI.
PMI is insurance that protects the lender — not you — if you default on the loan. It is required on conventional loans when your down payment is less than 20%. PMI typically costs 0.5–1.5% of the loan amount per year, added to your monthly payment. It is automatically cancelled once your loan-to-value ratio reaches 78% based on the original purchase price.
The most straightforward way is to put down 20% or more. Alternatively, you can use a piggyback loan (80/10/10 structure) where a second loan covers part of the down payment. VA and USDA loans do not require PMI regardless of down payment. Some lenders offer lender-paid PMI in exchange for a slightly higher interest rate.
Not necessarily. While 20% eliminates PMI and reduces your loan amount, it also ties up a large amount of cash that could be invested elsewhere. If your investment returns exceed your PMI cost, a smaller down payment may be financially optimal. Also consider emergency fund needs — buying a home with minimal savings left over can be risky. The right amount depends on your financial situation and goals.
Real-World Applications
Common Mistakes
Down Payment Requirements by Loan Type
| Loan Type | Min Down Payment | PMI Required? | Notes |
|---|---|---|---|
| Conventional (first-time) | 3% | Yes (until 20%) | Fannie Mae HomeReady/Home Possible |
| Conventional (standard) | 5% | Yes (until 20%) | Standard qualifying borrower |
| Conventional (no PMI) | 20% | No | Best long-term cost |
| FHA Loan | 3.5% | Yes (lifetime) | Credit score 580+; 10% if 500–579 |
| VA Loan | 0% | No | Active duty / veterans only |
| USDA Loan | 0% | Annual fee applies | Rural properties; income limits |
| Jumbo Loan | 10–20% | Varies | Lender-specific underwriting |
References
- Fannie Mae. Selling Guide: HomeReady Mortgage. Fannie Mae, 2024.
- U.S. Department of Housing and Urban Development. FHA Single Family Housing Policy Handbook 4000.1. HUD, 2024.
- U.S. Department of Veterans Affairs. VA Home Loan Guaranty Benefits. VA, 2024.
- Consumer Financial Protection Bureau. Explore Interest Rates — Mortgage. CFPB, 2024.
- Mishkin, Frederic S. The Economics of Money, Banking, and Financial Markets. Pearson, 2022.
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