Down Payment Calculator

How to Use the Down Payment Calculator

This down payment calculator turns a home price and a down payment percentage (or dollar amount) into the three figures that matter most before you shop for a mortgage: the cash you need upfront, the loan you will still owe, and the loan-to-value ratio lenders use to price risk. Every figure is estimated in your browser.

1. Enter the home price. Type the purchase price you are considering, for example 320,000.

2. Choose how you want to enter the down payment. Select percentage if you think in terms such as 20%, or amount if you already know the cash figure, such as 64,000.

3. Enter the down payment figure. With the percentage option, a value of 20 means 20% of the price, which is 64,000 on a 320,000 home. With the amount option, enter 64,000 directly.

4. Optionally estimate the monthly payment. Add an interest rate and loan term — for example 6% over 30 years on the remaining 256,000 loan — to see an estimated monthly principal and interest of about 1,535. Leave the rate blank to skip this step.

5. Read the results. The cards show the down payment, the loan amount and the loan-to-value ratio. A 64,000 down payment on a 320,000 home is exactly 80% LTV.

6. Check the PMI note. When LTV is above 80%, most lenders typically add private mortgage insurance; when it is at or below 80%, PMI is usually avoidable.

What Is a Down Payment and Why Does LTV Matter?

A down payment is the part of a home's purchase price that a buyer pays in cash rather than borrowing. The remaining balance becomes the mortgage. The basic relationships are simple: down payment = home price × down payment percentage, and loan amount = home price − down payment. On a 320,000 home, a 20% down payment is 64,000, which leaves a 256,000 loan. A larger down payment reduces both the amount borrowed and the interest paid over the life of the loan. Lenders describe the size of a loan relative to the property with the loan-to-value ratio, or LTV: LTV = loan amount ÷ home price × 100. A 20% down payment produces an 80% LTV; a 10% down payment produces 90%. The 80% line matters because many lenders treat it as the boundary between a lower-risk and a higher-risk loan. Above 80% LTV, a borrower is typically charged private mortgage insurance (PMI), which protects the lender — not the buyer — if the loan defaults. PMI commonly costs roughly 0.3% to 1.5% of the loan amount per year; on a 256,000 loan at 0.5%, that is about 1,280 a year, or roughly 107 a month. These results are estimates for planning only and are not financial or mortgage advice. The calculator ignores closing costs, property taxes, homeowners insurance, HOA fees and any lender-specific rules, and real interest rates and PMI terms vary by borrower, lender and location. Treat the output as a starting point for a conversation with a qualified mortgage professional, not a final quote.

Common Applications

1. Planning a 20% down payment. On a 400,000 home, a 20% down payment is 80,000, leaving a 320,000 loan at 80% LTV — the point at which PMI is typically avoidable.

2. Comparing 10% against 20%. On a 300,000 home, 10% down is 30,000 (90% LTV, PMI likely) while 20% is 60,000 (80% LTV, PMI typically avoidable). The extra 30,000 upfront can remove about 1,500 a year in PMI at a 0.5% rate.

3. Checking a low down payment. On a 250,000 home, a 3.5% down payment is 8,750, leaving a 241,250 loan at 96.5% LTV — a profile where PMI is almost always required.

4. Testing affordability from savings. A buyer with 50,000 saved can afford exactly a 20% down payment on a 250,000 home, or 25% on a 200,000 home.

5. Tracking when PMI can be dropped. With a 350,000 home and an initial 280,000 loan at 80% LTV, the same tool shows how the ratio falls further as the balance is paid down, which is when a borrower can ask a lender to cancel PMI.

The 20% Threshold and the Economics of PMI

The 80% loan-to-value convention is older than most modern loan programs, but it still shapes pricing. The reasoning is that a borrower with at least 20% equity has more to lose from a default and is statistically less likely to walk away when prices fall. To cover the added risk of a thin-equity loan, lenders require private mortgage insurance, which reimburses the lender for part of its loss if the borrower stops paying.

PMI is a real monthly cost. At 0.5% of a 256,000 loan, it adds about 107 a month — roughly 1,280 a year. That is why buyers often compare putting 20% down with putting less down and paying PMI: the smaller down payment frees up cash, but the insurance raises the monthly payment and does not build equity. Federal rules generally require PMI to be cancelled automatically once the loan reaches 78% LTV based on the original schedule, and borrowers can often request cancellation at 80%; lender policies differ.

Common Mistakes When Budgeting a Down Payment

The most frequent error is treating the down payment as the only upfront cost. Closing costs commonly add 2% to 5% of the purchase price, so a 300,000 home may require 6,000 to 15,000 on top of the deposit. A second mistake is draining an emergency fund to reach a round number such as 20%; a smaller down payment with a healthy cash buffer is often the safer choice.

Buyers also forget that a bigger down payment lowers the loan but not the property taxes, insurance or maintenance, and that a lower LTV does not guarantee approval. Finally, many people fixate on the down payment percentage while ignoring the interest rate: on a 256,000 loan, half a percentage point in rate can cost more over 30 years than a few thousand dollars of extra deposit.

How to Save Toward a Down Payment

A down payment goal becomes manageable once it is converted into a monthly number. Saving 40,000 over three years means putting aside about 1,111 a month; over five years, about 667 a month. Holding the money in a high-yield savings account rather than an investment account keeps the balance stable, which matters when the purchase date is close.

Automating a transfer on payday removes the temptation to spend, and directing windfalls such as bonuses or tax refunds straight to the goal shortens the timeline. Reducing the target price, choosing a program with a lower minimum down payment, or asking about assistance programs are all legitimate levers. The calculator lets you test each of these choices in seconds and see how they change the loan amount and LTV.

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