Down Payment Calculator
Find your down payment amount, loan size, loan-to-value ratio, and PMI requirement for any home purchase.
How to use this down payment calculator
- 1Enter the home purchase price.
- 2Try different down payment percentages — 3%, 5%, 10%, 20% — to see how each affects your loan size and PMI status.
- 3Reaching 20% (LTV of 80%) eliminates PMI, which saves $50–$200/month on most loans.
- 4Remember that closing costs are separate from the down payment — budget an additional 2–5% of purchase price.
How it's calculated
Down payment = price × percent. LTV = (price − down) ÷ price × 100. PMI required when LTV > 80%.
About the Down Payment Calculator
The down payment decision is one of the most significant financial choices in a home purchase — affecting not just the loan amount, but the monthly payment, PMI obligation, available loan programs, and interest rate. The right answer varies significantly based on individual financial circumstances.
The argument for putting 20% down is compelling for buyers who have the savings: no PMI, lower monthly payment, potentially better interest rate, and immediate meaningful equity position. In a declining market, 20% equity provides a cushion against going underwater. For buyers who will stay in the home long-term, the compounding effect of a lower payment invested elsewhere may not outperform the guaranteed PMI savings.
The argument for a smaller down payment is equally valid for many buyers: preserving cash for emergencies and investments, accessing the market sooner in rising-price environments, and taking advantage of low-down-payment programs with competitive rates. A buyer who puts 5% down and invests the remaining 15% in the stock market might end up better off financially than one who puts 20% down, if market returns exceed mortgage costs — but this requires discipline to actually invest the difference.
For most first-time buyers, the most important down payment strategy is simply reaching the minimum required for the best available loan program while maintaining adequate cash reserves. Stretching to a specific down payment percentage while depleting emergency funds creates fragility — a home purchase should not leave you unable to handle a $5,000 unexpected repair.
Frequently asked questions
Is a 20% down payment required to buy a house?
No — 20% is not required but is advantageous. Many loan programs allow much lower down payments: Conventional loans as low as 3% down (Fannie Mae HomeReady, Freddie Mac Home Possible), FHA loans at 3.5% down with 580+ credit score, VA loans at 0% down for eligible veterans and active-duty military, USDA loans at 0% down for eligible rural properties. The trade-offs for lower down payments: PMI on conventional loans below 20% down, higher mortgage rates in some cases, and lower initial equity — leaving you potentially underwater if prices decline.
How much money do I actually need to buy a house?
Beyond the down payment, budget for: closing costs (2–5% of purchase price, or $8,500–$21,250 on a $425,000 home), moving expenses ($1,000–$5,000 depending on distance), immediate repairs or upgrades ($2,000–$20,000+ depending on condition), and cash reserves (lenders often require 2–6 months of mortgage payments in savings after closing). On a $425,000 home with 10% down ($42,500) plus 3% closing costs ($12,750), plus $5,000 in reserves, you need approximately $60,000 in liquid assets at minimum — often more in practice.
Is it better to put more down or keep cash for investing?
This depends on the mortgage rate versus expected investment returns. If your mortgage rate is 7% and you expect investment returns of 7–10%, the comparison is close. The mortgage rate is a guaranteed cost; investment returns are uncertain. Risk-averse buyers prefer a larger down payment for lower monthly obligations and faster equity building. Return-focused buyers prefer a smaller down payment to keep more money invested, especially when mortgage rates are relatively low. There is no universally correct answer — it depends on your risk tolerance, emergency fund size, and investment horizon.
What is PMI and how much does it cost?
Private Mortgage Insurance protects the lender (not you) if you default when you have less than 20% equity. PMI costs typically 0.5–1.5% of the original loan amount per year, paid monthly. On a $340,000 loan (after 20% down on a $425,000 home), PMI might cost $0 since LTV is exactly 80%. On a $382,500 loan (after 10% down), PMI might cost $1,913–$5,738 per year ($159–$478/month). PMI can be cancelled once you reach 20% equity through payments and/or appreciation — you must request cancellation at 20% equity; lenders are required to cancel automatically at 22% equity.