Down Payment Calculator
Calculate your home purchase costs with our comprehensive down payment calculator tools
Use Upfront Cash
Calculate affordable home price based on your available cash and desired down payment percentage.
Use Home Price
Calculate required cash for a specific home price and down payment percentage.
Use Both Values
Calculate the resulting down payment percentage from home price and available cash.
Down Payment Calculator
A down payment is one of the most significant financial steps in purchasing an expensive item, particularly a home or car. It represents the initial, upfront portion of the total purchase price that you pay directly, which in turn reduces the amount of money you need to borrow for the remaining balance.
For a home purchase, the purchase price is equal to the sum of the down payment and the final mortgage loan amount. This calculator tool helps prospective homeowners determine the various financial figures related to this crucial initial outlay.
What is a Down Payment?
A down payment is an upfront payment made by the buyer to secure the purchase of an asset. When buying a house, the down payment is typically expressed as a percentage of the home’s purchase price.
Formula:
Down Payment (Amount) = Home Purchase Price × Down Payment Percentage
For example, on a $400,000 home, a standard 20% down payment would be $80,000. The remaining $320,000 would be the principal amount of your mortgage loan.
The amount of your down payment directly impacts your monthly mortgage payment and the total interest paid over the life of the loan.
Understanding Closing Costs:
While the down payment is often the largest single upfront expense, it is important to remember that it is not the only cash required at closing. Closing costs are a variety of fees and expenses charged by the lender and third parties for services related to the sale. These costs must be paid on or before the closing date.
Common examples of closing costs include:
Loan origination fees
Appraisal fees
Inspection fees
Title insurance
Attorney fees
Prepaid property taxes and homeowner’s insurance
As a rough estimate, closing costs typically range from 2% to 5% of the home’s purchase price. This calculator defaults to an estimate of 3%, but you can adjust this amount as a percentage or a fixed dollar amount in our tool.
Total Cash Needed Upfront = Down Payment + Closing Costs
Different Loans, Different Down Payment Requirements
The minimum required down payment for a home in the U.S. is largely determined by the type of mortgage loan you choose:
| Loan Type | Typical Down Payment | Key Requirement / Feature |
|---|---|---|
| Conventional Loan | 20% | Requires Private Mortgage Insurance (PMI) if less than 20% is put down. |
| FHA Loan | As low as 3.5% | Government-insured loan for low-to-moderate-income buyers. Requires MIP. |
| VA Loan | 0% | Backed by the Department of Veterans Affairs; available to eligible service members, veterans, and spouses. |
| USDA Loan | 0% | For properties in eligible rural and suburban areas. Income limits apply. |
Private Mortgage Insurance (PMI):
For conventional loans, if you make a down payment less than 20%, your lender will require you to purchase Private Mortgage Insurance (PMI). This protects the lender if you default on the loan.
PMI is usually paid as a monthly fee added to your mortgage payment and continues until your loan balance reaches 80% of the home’s original value.
FHA and VA Loans
FHA Loans
Backed by the Federal Housing Administration, these are popular for first-time or lower-income buyers, requiring a down payment as low as 3.5%. However, they require an upfront Mortgage Insurance Premium (MIP) plus monthly MIP payments.
VA Loans
Subsidized by the Department of Veterans Affairs, these are a major benefit, as they require no down payment (0%) for eligible applicants and do not require monthly mortgage insurance.
Pros and Cons: Large vs. Small Down Payment
A Larger Down Payment (e.g., 20% or more)
AdvantagesÂ
Lower monthly payments due to a smaller loan amount.
Avoids PMI on conventional loans, saving a sizable monthly fee.
May qualify you for better interest rates, reducing total interest paid.
Signals lower risk to the lender, potentially easing loan approval.
Disadvantages
Ties up a large amount of cash upfront.
Reduces cash available for immediate home improvements or an emergency fund.
If the housing market declines, the large investment could lose value.
Opportunity cost—the money could have been invested elsewhere.
A Smaller Down Payment (e.g., 3.5% to 15%)
AdvantagesÂ
Requires less cash upfront.
Allows you to enter the housing market sooner.
Greater financial flexibility.
Disadvantages
Requires PMI on conventional loans.
May lead to a higher interest rate.
Larger loan amount = more interest over time.
Slower equity building in early years.
Where to Get Down Payment Funds:
Personal Savings
Savings accounts or CDs are the most common source. Stocks or bonds may grow faster but carry more short-term risk.
Gift Funds
Many loan programs allow the down payment to be fully or partially covered by a gift from family or friends. A gift letter is required.
Down Payment Assistance (DPA) Programs
Local or state governments and nonprofits offer grants or zero-interest loans, often targeted at first-time buyers.
Retirement Funds (IRA/401k)
IRAs:
First-time home-buyers can withdraw up to $10,000 without penalty.
Traditional IRA withdrawals may still be taxed.
401(k) Loan:
You may borrow up to $50,000 or half your vested balance.
You must repay the loan with interest.
Piggyback Loan (80-10-10)
80% primary mortgage
10% second loan
10% down payment
This strategy helps avoid PMI without a full 20% down payment.
How to Use the Down Payment Calculator:
Our versatile Down Payment Calculator features three calculation tools to help you plan your finances:
1. Use Upfront Cash
Find out the maximum home price you can afford based on:
The cash you have
Your chosen down payment percentage
2. Use Home Price
Determine the total cash needed (down payment + closing costs) for:
A specific home price
A chosen down payment percentage
3. Use Both Values
Calculate:
Your down payment percentage
Whether you need Private Mortgage Insurance (PMI)
Related Calculators:
Think of it as your initial cash contribution toward buying a house or car. The size of this payment directly lowers the amount you need to borrow for your mortgage.Â
No, not always. While 20% lets you skip Private Mortgage Insurance (PMI) on conventional loans, programs like FHA loans accept as little as 3.5%, and VA/USDA loans can be 0% for eligible buyers.Â
No. Your down payment is applied to the purchase price, but you’ll also need cash for closing costs (fees like appraisal, inspection, and loan origination), which typically run 2-5% of the home price.Â
Yes! Many popular loan types, including FHA and conventional, allow you to use gift funds from family or friends, provided there is a formal “gift letter” confirming the money doesn’t need to be repaid.
Paying a larger amount upfront typically saves you money in the long run! You usually get a lower monthly payment, better interest rates, and you avoid the added cost of PMI.Â