Standard mortgage
Gov. insured
Veterans only
Rural areas
PMI is required when your down payment is less than 20% of the home price for conventional loans.
VA loans do not require PMI. FHA loans have MIP (Mortgage Insurance Premium) instead.
A down payment is the initial upfront payment you make when purchasing a home. It represents your equity in the property from day one.
- Larger down payments mean smaller loans
- 20% down avoids PMI on conventional loans
- Lower LTV ratios often get better interest rates
- Down payment shows lenders you're financially stable
- Set up automatic transfers to a dedicated savings account
- Consider down payment assistance programs
- Look into first-time homebuyer programs
- Reduce unnecessary expenses and redirect to savings
- Consider a side income or freelance work
- Check if family gift funds are allowed by your lender
Important Disclaimer
Down payment calculations are estimates and may vary based on lender requirements and local regulations. Actual closing costs, PMI rates, and other fees may differ. Consult a mortgage professional for personalized advice.
A down payment is the initial amount of money you pay upfront when purchasing a home, expressed as a percentage of the property's total purchase price. The remaining balance is financed through a mortgage loan from a lender. Down payments typically range from 3% to 20% of the home's price, though higher percentages are possible. The larger your down payment, the smaller your monthly mortgage payments, and the less interest you'll pay over the loan term.
Lenders require down payments to reduce their risk and ensure you have a financial stake in the property. Down payments also determine your Loan-to-Value (LTV) ratio, which affects whether you'll need to pay Private Mortgage Insurance (PMI) — typically required when down payment is less than 20%.
Enter the total home purchase price and your desired down payment percentage. The calculator automatically computes your down payment amount, loan amount, and LTV ratio. It also estimates PMI costs if your down payment is below 20%, helping you understand the true cost of borrowing.
The calculator provides estimates for closing costs (typically 2-5% of purchase price) and shows the total cash you'll need at closing. Use the comparison scenarios to see how different down payment percentages affect your loan amount, monthly PMI, and total borrowing costs.
Your LTV (Loan-to-Value) ratio is calculated as the loan amount divided by the home's value. For example, a $300,000 home with a $60,000 down payment (20%) has an LTV of 80%. Most lenders require PMI when LTV exceeds 80%, meaning your down payment is less than 20%. PMI protects the lender if you default on the loan.
PMI costs typically range from 0.3% to 1.5% of the loan amount annually, added to your monthly mortgage payment. Once you build 20% equity in your home (through down payment plus principal repayment), you can request PMI removal, eliminating this additional cost.
Larger Down Payment (15-20%+): Reduces monthly payments, eliminates PMI, improves loan terms, and shows strong financial commitment. Downside: requires significant upfront cash and reduces liquidity.
Minimum Down Payment (3-5%): Preserves cash for emergencies, investments, or other needs. Downside: higher monthly payments, PMI costs, and more interest paid over loan term.
20% Down Payment: The "sweet spot" — eliminates PMI while maintaining reasonable liquidity. Balances the benefits of lower payments with preserving emergency funds.
This calculator provides estimates for educational purposes. Actual down payment requirements, PMI costs, and closing costs vary by lender, location, loan type, and credit profile. This calculator does not account for property taxes, homeowners insurance, HOA fees, or other costs of homeownership. Consult with a mortgage professional for accurate loan pre-qualification and detailed cost estimates.