Down Payment Calculator

Think of the down payment as the line between what you own and what the bank owns on day one. If you put $50,000 down on a $250,000 home, you own 20 percent of it outright from the moment you close. The lender owns the other 80 percent through the mortgage — and that ratio is exactly what drives most of the decisions in this calculator.

The math is simple: down payment amount equals purchase price multiplied by the percentage you choose. The loan amount is what remains. But the percentage choice triggers a hard threshold at 20 percent. Below that line, lenders impose private mortgage insurance because statistically, borrowers with less than 20 percent equity default more often. PMI is not insurance for you — it protects the lender. You pay it and receive no direct benefit.

The PMI estimate shown here uses a midpoint rate of roughly 0.8 percent of the loan amount annually. Your actual PMI rate depends on your credit score, loan type, and lender — it can range from 0.5 to 1.5 percent. The estimate is useful for comparison but verify your exact rate with your lender during the pre-approval process.

Use this calculator when you are comparing home prices against your current savings and want to know whether you are ready to make an offer. It is most useful in the early research phase when you are setting a price range — plug in different home prices to reverse-engineer the savings target you need, then compare that to what you have today.

It is also useful when an agent or seller asks how much you are prepared to put down and you want to quickly verify that a stated percentage translates to a cash amount you actually have available. Having the number in front of you before those conversations prevents miscommunication and positions you as a prepared buyer.

This tool is not appropriate when you are trying to model the full cost of homeownership, evaluate whether buying makes more sense than renting, or compare mortgage products. It handles one specific calculation — the upfront cash requirement. For rate comparisons, amortization schedules, or rent-vs-buy analysis, you need additional tools. Do not use the loan amount from this calculator as your final mortgage figure — lenders add origination fees and points that alter the effective amount financed.

Mistake 1 — treating the down payment as the only upfront cost. Buyers focus entirely on the down payment number and then get blindsided at closing by 2 to 5 percent in fees on top of it. On a $350,000 home with 10% down, that is $35,000 for the down payment plus up to $17,500 in closing costs — nearly $53,000 total. Plan for both or you risk being short the day you sign.

Mistake 2 — putting exactly 20% down when slightly less frees up emergency cash. Many buyers stretch to hit the 20% threshold and then have almost nothing left in savings. A 19% down payment on a $350,000 home costs $1,750 less than 20% — and your PMI on that remaining gap might be $85/month. That is a reasonable tradeoff if it means keeping a meaningful cash cushion. Liquidity matters more than most buyers realize in the first months of ownership.

Mistake 3 — not checking whether a larger down payment actually improves the rate. Some lenders offer pricing tiers at 5%, 10%, 15%, and 20% down. Putting down 12% instead of 10% may not move your rate at all, while moving from 19% to 20% eliminates PMI entirely. The only way to know is to ask your lender for a loan estimate at two or three down payment levels.

The core formula has two steps. First, multiply the home price by the decimal form of your percentage: a 15% down payment on a $380,000 home is $380,000 x 0.15 = $57,000. Second, subtract that from the price to get your loan: $380,000 - $57,000 = $323,000. Everything else flows from those two numbers.

The PMI threshold calculation works in reverse: to find the exact cash that eliminates PMI, multiply the home price by 0.20. If your planned down payment falls short of that number, the gap shown in this tool is the exact dollar amount you would need to add to cross the threshold. On a $400,000 home that gap between 15% and 20% down is exactly $20,000 — which eliminates roughly $200/month in PMI costs.

A less obvious calculation: the savings shortfall or surplus shown here does not account for closing costs, moving expenses, or cash reserves. Lenders typically want to see 2 to 6 months of mortgage payments in reserve after closing. The number this tool shows you is the down payment in isolation — your true cash requirement at closing will be higher.

The 20 percent PMI threshold is a conventional loan convention, not a physical law. On conforming loans backed by Fannie Mae and Freddie Mac, lender-paid PMI (LPMI) lets borrowers avoid the monthly charge by accepting a slightly higher interest rate — sometimes as little as 0.125 to 0.25 percent higher. On a $300,000 loan, that rate difference might cost less over five years than paying monthly PMI, depending on when you plan to sell or refinance. This calculator cannot model that tradeoff, but it is the first question a financially literate buyer should ask their loan officer at any down payment below 20 percent.