Down Payment Calculator
The down payment calculator helps you understand the financial impact of different down payment percentages. It shows how much cash you need upfront, the resulting loan size, and your monthly mortgage payment — making it easy to compare scenarios as you plan your home purchase.
Advertisement
Calculator
See your Down Payment Calculator results
Enter your email to unlock results — free forever.
No spam, ever. Unsubscribe at any time.
Advertisement
Formula
Down Payment = Home Price × (Down Payment % / 100); Monthly Payment = L × [r(1+r)^n] / [(1+r)^n − 1]
The down payment is a straightforward percentage of the home price. The loan amount is the home price minus the down payment. Monthly payment uses the standard amortization formula where L is the loan amount, r is the monthly interest rate (annual rate ÷ 12, as decimal), and n is the total number of monthly payments.
How to use the Down Payment Calculator
- 1
Enter your home price
Value should be in $.
- 2
Enter your down payment percentage
Value should be in %.
- 3
Enter your loan term
Value should be in years.
- 4
Enter your interest rate
Value should be in %.
- 5
Read your results instantly
Results update in real time as you type.
Advertisement
How much should you put down?
The traditional answer is 20%, which avoids PMI and gives you the lowest monthly payment for a given home price. But 20% of a $400,000 home is $80,000 — a sum that takes years to save in most markets. The right down payment depends on your specific circumstances, not a universal rule.
A smaller down payment (3-10%) lets you buy sooner and preserves cash for an emergency fund, closing costs, and home repairs. The cost is a higher monthly payment and PMI if under 20%. A larger down payment reduces your loan size, lowers your monthly payment, and may qualify you for a slightly better interest rate. It also builds equity faster.
The 5% sweet spot works well for many buyers: enough to demonstrate financial seriousness, reduce the loan size meaningfully, and leave sufficient cash reserves for post-purchase costs. Run multiple scenarios in this calculator to see how different down payment percentages affect your monthly payment and total interest.
Down payment assistance programs
Many first-time buyers don't realize that significant down payment assistance is available at the federal, state, and local levels. HUD-approved programs, state housing finance agencies, and some employers offer grants, forgivable loans, and low-interest second mortgages specifically to help with down payments.
FHA loans require only 3.5% down with a 580 credit score. Fannie Mae's HomeReady and Freddie Mac's Home Possible programs allow 3% down for income-qualified buyers. VA loans (for veterans and active military) and USDA rural development loans require zero down payment for qualifying borrowers.
Down payment assistance programs often have income limits, purchase price caps, and first-time buyer requirements. The National Council of State Housing Agencies maintains a database of programs by state. Even a $5,000-$15,000 grant can make homeownership achievable years earlier than saving a full down payment alone.
Advertisement
The opportunity cost of a large down payment
Putting more money down reduces your loan and monthly payment, but it also removes that cash from your investment portfolio. If your expected investment return (say 7%) exceeds your mortgage rate (say 6.5%), keeping more cash invested and taking a larger mortgage may be mathematically optimal.
This analysis is more nuanced in practice: investment returns are variable while mortgage payments are fixed. A large down payment provides a guaranteed return equal to your interest rate, while stock market returns carry risk. Additionally, mortgage interest is no longer as tax-deductible for most borrowers after the 2017 tax reform increased the standard deduction.
For most buyers who aren't sophisticated investors, putting at least 20% down — to eliminate PMI and reduce interest costs — is the sound choice. For buyers with high-interest other debt, paying that off before increasing the down payment is typically better. There's rarely a single universally optimal answer.
Tips & Insights
Closing costs require separate savings
Your down payment is not your only upfront cost. Closing costs typically add another 2-5% of the loan amount — on a $300,000 purchase with 10% down, that's $5,400-$13,500 on top of the $30,000 down payment. Make sure your savings cover both. Some lenders offer no-closing-cost options that roll fees into a slightly higher rate.
Gift funds are allowed with documentation
Many loan programs allow part or all of your down payment to be a gift from a family member, with a signed gift letter confirming it doesn't need to be repaid. Conventional loans (with PMI) may allow 100% gift funds for primary residences. FHA allows gift funds from approved sources. This can significantly accelerate your path to homeownership if family support is available.
LPMI can be better than standard PMI
Lender-paid mortgage insurance (LPMI) rolls your PMI cost into a slightly higher interest rate. The advantage: no separate PMI line item on your payment, and the higher rate is tax-deductible if you itemize. The disadvantage: the rate stays with the loan, unlike borrower-paid PMI which you can cancel at 20% equity. Run the numbers for your specific situation and timeline.
Worked Examples
Comparing 10% vs. 20% down
A 10% down payment on a $350,000 home requires $35,000 upfront and a $315,000 loan, yielding a monthly payment of about $2,096. At 20% down ($70,000), the loan drops to $280,000 and the monthly payment to $1,863 — saving $233/month, but requiring $35,000 more in cash at closing.
Minimum down payment scenario
An FHA-minimum 3.5% down on a $250,000 home is $8,750 upfront. The resulting $241,250 loan at 7.5% requires a monthly payment of about $1,687. Note that FHA loans also require mortgage insurance premiums (MIP), adding approximately $167/month at this loan size.
Advertisement
Frequently Asked Questions
What is the minimum down payment required to buy a home?
The minimum varies by loan type: conventional loans allow as little as 3%, FHA loans 3.5% (with a 580+ credit score), and VA/USDA loans require 0% for qualifying borrowers. Jumbo loans (above conforming loan limits) typically require 10-20% down. A higher down payment generally means better rates and terms.
Does a bigger down payment get a lower interest rate?
Generally yes, especially above the 20% threshold, because lenders see lower risk. However, the rate improvement from increasing a down payment from 20% to 30% is usually modest — a fraction of a percentage point. The bigger rate impact typically comes from your credit score, loan type, and lender competition than from incremental increases in down payment above 20%.
Can I use retirement funds for a down payment?
You can withdraw from a Roth IRA (contributions, not earnings) penalty-free for a first home purchase up to $10,000. Traditional IRA withdrawals are subject to income tax, but first-time buyers can avoid the 10% early withdrawal penalty on up to $10,000. Using 401(k) funds typically involves either a loan (up to 50% of balance, max $50,000) or a hardship withdrawal, which triggers income tax plus penalties. Depleting retirement savings for a down payment should generally be a last resort.
What is an earnest money deposit?
Earnest money is a good-faith deposit made when your offer on a home is accepted, typically 1-3% of the purchase price. It signals seriousness to the seller and is credited toward your down payment at closing. If you back out of the deal without a contractual reason (financing contingency, inspection contingency), you may forfeit the earnest money. It is not the same as the down payment.
How long does it take to save a down payment?
At a 10% savings rate on a $75,000 income, saving $7,500/year means a 3.5% down payment on a $250,000 home takes about 11-12 months. A 20% down payment on the same home takes over 6 years. Location, income, expenses, and any windfalls (bonuses, inheritances, assistance programs) all affect the timeline significantly. High-yield savings accounts and I-bonds can accelerate saving by earning meaningful interest on the accumulating funds.
Advertisement