What is Down Payment Calculator?

A down payment calculator helps homebuyers explore different down payment scenarios. Enter the home price and see how various down payment percentages affect your loan amount, monthly mortgage payment, and whether you'll need private mortgage insurance (PMI).

The calculator runs the full amortization formula so the monthly payment line reflects principal plus interest at your chosen rate and term, not a flat 'price minus down payment' divide. PMI is flagged whenever the down payment falls under 20%, since most US lenders treat that line as the cutoff for waiving private mortgage insurance.

How to use

1. Enter the home purchase price and your target down payment percentage (e.g., 5%, 10%, 20%).
2. View the down payment, loan balance, monthly principal-and-interest payment, and total interest paid over the full loan term.
3. Compare multiple scenarios side by side to find the right balance between upfront cost and monthly payment.

When to use

• Deciding whether to put 10% down now or wait six months to reach 20% and skip PMI.
• Comparing a 30-year and 15-year mortgage at the same down payment to see the monthly gap.
• Stress-testing how a half-point rate change moves your monthly payment before you lock.

Result

For a $400,000 home: 5% down = $20,000 (loan: $380K, PMI required), 10% down = $40,000 (loan: $360K), 20% down = $80,000 (loan: $320K, no PMI). At 6.5% interest over 30 years.

FAQ

Does the monthly payment include taxes and insurance?

Yes — fill in the optional Annual Property Tax, Annual Insurance, and Monthly HOA fields under the calculator inputs to see a Total Monthly Cost line that adds all of these to the principal-and-interest figure. If you leave the optional fields blank, the displayed monthly payment is principal and interest only, which is what lenders quote on rate sheets.

Why is PMI flagged at exactly 20%?

Conventional loans backed by Fannie Mae and Freddie Mac waive PMI once the loan-to-value ratio hits 80%, which is the same as putting 20% down. FHA loans handle it differently — they keep mortgage insurance for the life of the loan in most cases regardless of down payment.

Is a bigger down payment always better?

Not automatically. Putting an extra $40,000 down might save $250 a month, but that same cash in an index fund averaging 7% returns more over 30 years than the mortgage rate costs you. Run the numbers against your other savings goals before draining your reserves.

What counts as 'down payment' money?

Cash in checking, savings, taxable brokerage, plus documented gift funds from family. Most lenders also allow some 401(k) loans or Roth IRA withdrawals. Closing costs (around 2-5% of price) are separate from the down payment, but the calculator folds them into a total cash-to-close figure so you can budget the full up-front amount.

Can I drop PMI later if I start below 20%?

Yes, once you've paid the balance down to 80% LTV the lender must cancel PMI on request. If home values rise enough that an appraisal puts you under 80%, you can request cancellation even before that. PMI auto-cancels at 78% LTV on the original amortization schedule.

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