Down Payment Calculator
Find how much you need to save for a down payment at different percentages.
Your Details
Breakdown
Visual split of the key components
- Down Payment40000
- Loan Amount360000
Sensitivity
How the result changes across a range
How It Works
- Enter the values on the left.
- Press Calculate to see your results and charts.
- Use Reset to start over from the defaults.
Formula Used
Loan Amount = Home Price − Down Payment.
Good to Know
- • 20% down avoids PMI on a conventional loan.
- • Some loan programs allow down payments as low as 3-3.5%.
Important Notes
- • Doesn't include closing costs, which are separate from the down payment.
- • PMI requirement varies by loan type and lender.
Why 20% Is a Common Reference Point
20% down is often cited as a benchmark because it's the threshold most conventional lenders use to waive private mortgage insurance (PMI) — below that, lenders typically require PMI to protect themselves against the higher risk of a smaller equity cushion. That said, many buyers put down less than 20% and simply factor PMI into their monthly budget until enough equity builds up to remove it.
Trade-offs of a Smaller Down Payment
A smaller down payment means less cash needed upfront and potentially getting into a home sooner, but it also means a larger loan (more interest over time), a higher monthly payment, and likely PMI until enough equity is built. Whether a smaller down payment makes sense depends on how the freed-up cash would otherwise be used — paying down other debt, investing, or simply maintaining a stronger emergency fund.
Terms Worth Understanding
- Down payment — the portion of the purchase price paid upfront in cash, not financed.
- PMI threshold — the 20% down payment level that typically avoids private mortgage insurance on conventional loans.
A Real Example: 5% vs. 20% Down on a $400,000 Home
20% down: $80,000 down, $320,000 loan, no PMI needed
The 20% option requires $60,000 more cash upfront but finances $60,000 less — at 6.5% over 30 years, that smaller loan alone saves roughly $380/month in principal & interest, plus typically another $150-250/month by avoiding PMI. The trade-off is tying up significantly more cash at closing instead of keeping it liquid or invested elsewhere.
Down Payment Percentage Table
On a $400,000 home:
| Down % | Down Payment | Loan Amount |
|---|---|---|
| 3.5% | $14,000 | $386,000 |
| 10% | $40,000 | $360,000 |
| 20% | $80,000 | $320,000 |
Mistakes to Avoid About Down Payments
- Believing 20% is always required — many programs allow far less.
- Draining all savings for the down payment — leaving no emergency fund is risky.