Down Payment Calculator
See how different down payment amounts affect your monthly mortgage payment, PMI requirements, and total interest paid. Compare standard scenarios at 3%, 5%, 10%, 15%, 20%, and 25% down, or enter your own amount. Putting at least 20% down eliminates the need for private mortgage insurance (PMI).
Down Payment Calculator Inputs
Enter Home & Loan Details
Your Down Payment Scenario
Estimated Monthly Payment
- Total Monthly Payment
- $2,219.79 /mo
With 20.0% down ($70,000) on a $350,000 home
- Principal & Interest
- $1,769.79
- Property Tax
- $350.00
- Home Insurance
- $100.00
- Down Payment
- $70,000 (20.0%)
- Loan Amount
- $280,000
- Total Interest Paid
- $357,124
- LTV Ratio
- 80.0%
- Interest Rate
- 6.500%
No PMI required
Your down payment of 20.0% keeps your LTV ratio at 80.0%, which is at or below the 80% threshold. You do not need to pay private mortgage insurance.
Down Payment Comparison
Compare how different down payment percentages affect your monthly payment, PMI costs, and total interest. The 20% row is highlighted as the PMI elimination threshold.
| Down % | Down Payment | Loan Amount | Monthly P&I | Monthly PMI | Monthly Total | Total Interest |
|---|---|---|---|---|---|---|
| 3.0% | $10,500 | $339,500 | $2,145.87 | $198.04 | $2,793.91 | $433,013 |
| 5.0% | $17,500 | $332,500 | $2,101.63 | $193.96 | $2,745.59 | $424,087 |
| 10.0% | $35,000 | $315,000 | $1,991.01 | $183.75 | $2,624.76 | $401,764 |
| 15.0% | $52,500 | $297,500 | $1,880.40 | $173.54 | $2,503.94 | $379,444 |
| 20.0% No PMI Your choice | $70,000 | $280,000 | $1,769.79 | $0.00 | $2,219.79 | $357,124 |
| 25.0% | $87,500 | $262,500 | $1,659.18 | $0.00 | $2,109.18 | $334,805 |
PMI threshold: At 20% down ($70,000), PMI is eliminated. Down payments below 20% incur an estimated PMI of 0.7% of the loan amount annually. Increasing your down payment from 3% to 20% saves approximately $75,889 in total interest over the life of the loan.
Monthly Payment by Down Payment Level
Total Interest Paid vs. Down Payment
How Down Payments Work
A down payment is the upfront cash you contribute when purchasing a home. It reduces the amount you need to borrow (the loan principal), which directly affects your monthly payment, total interest paid over the life of the loan, and whether you'll need to pay private mortgage insurance (PMI). The standard benchmark is 20% of the home's purchase price, but many loan programs allow significantly less. Understanding the trade-offs between a smaller and larger down payment is one of the most important financial decisions you'll make as a homebuyer.
Understanding Private Mortgage Insurance (PMI)
Private mortgage insurance is required by most conventional lenders when your down payment is less than 20% of the home price (i.e., your loan-to-value ratio exceeds 80%). PMI protects the lender — not you — against the risk of default.
How Much Does PMI Cost?
PMI typically ranges from 0.5% to 1.5% of the original loan amount per year. This calculator estimates PMI at 0.7% annually. On a $280,000 loan, that's roughly $163/month. Your actual rate depends on your credit score, LTV ratio, and lender.
How to Remove PMI
PMI can be removed once you reach 20% equity in your home. This happens naturally as you pay down the loan, or you can request early removal if your home has appreciated. Under the Homeowners Protection Act, lenders must automatically cancel PMI when your LTV reaches 78%.
Down Payment Strategies
Minimum Down Payment (3-5%)
Allows you to buy sooner with less cash upfront. Best for buyers with strong income but limited savings, or in rapidly appreciating markets. The trade-off is higher monthly payments and mandatory PMI until you reach 20% equity.
The 20% Sweet Spot
Putting 20% down eliminates PMI entirely, reduces your monthly payment, and may help you qualify for better interest rates. It's the traditional target for buyers who want to minimize long-term costs.
More Than 20%
Putting down more than 20% further reduces your loan amount and monthly payment. This approach makes sense if you have substantial savings and want to minimize interest costs, or if you're buying in a competitive market and want a stronger offer.
Down Payment Assistance Programs
Many states and local governments offer down payment assistance through grants, low-interest loans, or tax credits. FHA loans require only 3.5% down, while VA and USDA loans may require zero down payment for eligible borrowers.
How Down Payment Affects Total Cost
The relationship between down payment size and total cost is straightforward: a larger down payment means a smaller loan, which means less interest paid over the loan's life. But the effect of PMI creates a notable "jump" in savings at the 20% threshold.
Example with your inputs: On a $350,000 home at 6.500% for 30 years, the difference between 3% down and 20% down is:
- Monthly payment difference: $574.12/mo ($2,793.91 vs $2,219.79)
- Total interest savings: $75,889 over the life of the loan
- PMI eliminated: $198.04/mo ($2,376/year) saved
Factors to Consider When Choosing Your Down Payment
Emergency Fund
Don't drain your savings entirely for the down payment. Financial advisors recommend keeping 3-6 months of expenses in reserve after closing. Homeownership comes with unexpected costs like repairs, maintenance, and appliance replacements.
Closing Costs
Budget 2-5% of the home price for closing costs on top of your down payment. These include lender fees, title insurance, appraisal, and prepaid items like property taxes and insurance.
Opportunity Cost
A larger down payment ties up cash in your home. If your mortgage rate is low, investing that money in the stock market or retirement accounts might yield higher returns over time. Consider your complete financial picture.
Market Conditions
In competitive markets, a larger down payment can make your offer more attractive to sellers. It signals financial stability and reduces the risk of financing falling through.
Related Calculators
Frequently Asked Questions
How much should I put down on a house?
The ideal down payment depends on your financial situation. While 20% is the traditional benchmark because it eliminates PMI, many buyers put down 3-10% to buy sooner. Consider your monthly budget, emergency fund, closing costs, and other financial goals. Use the comparison table above to see exactly how each percentage affects your payments.
What is the minimum down payment for a conventional loan?
For conventional loans, the minimum down payment is typically 3% for first-time homebuyers (via Fannie Mae's HomeReady or Freddie Mac's Home Possible programs) and 5% for repeat buyers. FHA loans require 3.5% with a credit score of 580+, while VA and USDA loans may offer 0% down for eligible borrowers.
When does PMI go away?
For conventional loans, you can request PMI removal once your LTV reaches 80% (meaning you have 20% equity). Under the Homeowners Protection Act, your lender must automatically cancel PMI when your LTV reaches 78% based on the original amortization schedule. You can also get PMI removed earlier if your home has appreciated in value — request a new appraisal and contact your lender. Note that FHA loans have different rules: mortgage insurance premiums (MIP) last for the life of the loan if your down payment was less than 10%.
Is it worth waiting to save a bigger down payment?
It depends on several factors: the rate of home price appreciation in your area, your rent costs while saving, expected changes in mortgage rates, and your ability to save consistently. In rapidly appreciating markets, waiting could mean homes become less affordable even with a larger down payment. In stable or declining markets, saving more can significantly reduce your long-term costs. Run the numbers for both scenarios — buying now with less down vs. waiting to save more.
Can I use gift money for a down payment?
Yes, most loan programs allow gift money for down payments, but there are rules. Conventional loans typically require that gift funds come from a family member, fiance, or domestic partner. FHA loans are more flexible about gift sources. In all cases, you'll need a gift letter confirming the money is a gift, not a loan, and documentation of the transfer. Some lenders may require that a portion of the down payment comes from your own savings.
Does a larger down payment get me a better interest rate?
Potentially, yes. Lenders use loan-level pricing adjustments (LLPAs) that factor in your LTV ratio. Borrowers with lower LTV ratios (larger down payments) often qualify for slightly better rates because the loan is considered less risky. The rate improvement is typically modest (0.125-0.25%) but can save thousands over the life of a 30-year mortgage. The biggest rate improvement comes from having a strong credit score combined with a solid down payment.
How accurate is this down payment calculator?
The principal and interest calculations use the standard amortization formula and are accurate to the cent. Property tax and insurance estimates depend on the values you enter. PMI is estimated at 0.7% of the loan amount annually — your actual PMI rate will vary based on your credit score, LTV ratio, and lender. This calculator does not account for HOA fees, closing costs, rate differences between LTV tiers, or FHA/VA-specific mortgage insurance structures. For exact figures, consult with a mortgage lender.