Down Payment Calculator

A down payment is the upfront cash portion of the home purchase price you pay directly — the rest is financed through your mortgage. It is calculated as a percentage of the home price. For example on a $400,000 home a 20% down payment equals $80,000 upfront. The remaining $320,000 becomes your mortgage loan amount. A larger down payment means a smaller loan and lower monthly payments.

PMI stands for Private Mortgage Insurance. On conventional loans lenders require PMI when your down payment is less than 20% — it protects the lender if you default. PMI typically costs 0.5% to 1.5% of the loan amount per year added to your monthly payment. The most straightforward way to avoid PMI is to put down at least 20%. Alternatively VA and USDA loans require no PMI regardless of down payment. PMI can also be cancelled once your loan balance reaches 80% of the home value.

Closing costs are fees paid to the lender and third parties at the time of purchase — separate from your down payment. They typically include loan origination fees, appraisal fees, title insurance, inspection fees, and prepaid taxes and insurance. Budget 2% to 5% of the home purchase price for closing costs. On a $400,000 home that is $8,000 to $20,000 in addition to your down payment. Our calculator defaults to 3% but you can adjust this to match your situation.

Not always. A larger down payment lowers your monthly payment, eliminates PMI, and reduces total interest paid — but it also ties up a large amount of cash upfront. If putting 20% down leaves you with no emergency fund that creates financial risk. Many financial advisors recommend keeping 3 to 6 months of expenses in savings even after closing. Use our calculator to compare different down payment amounts and find the right balance for your specific situation.