Down payment calculator

What a down payment is — and the 20% rule

A down payment is the slice of a home’s price you pay in cash upfront; the lender finances the rest as your mortgage. It’s quoted as a percentage of the purchase price, so a 20% down payment on a $400,000 home is $80,000, leaving a $320,000 loan. The bigger your down payment, the smaller your loan — and everything that flows from it: your monthly payment, the interest you pay over time, and whether you owe mortgage insurance.

You’ve probably heard you need 20% down. That figure is real but widely misunderstood. It isn’t a minimum to buy — it’s the level at which lenders stop requiring private mortgage insurance. Put down less and you can still get a loan; you’ll just carry PMI until you build enough equity. The calculator above shows your down payment, loan amount and PMI status the moment you type a price and a percentage.

PMI, explained

Private mortgage insurance is an extra charge that protects the lender if you stop paying — it does nothing for you except make a low-down-payment loan possible. It’s typically required on conventional loans when you put down under 20%, and commonly runs somewhere around 0.3%–1.5% of the loan per year, billed monthly. This tool uses a rough 0.5%-per-year estimate to give you a ballpark; your actual rate depends on your credit, the loan, and the size of your down payment.

The good news is PMI isn’t forever. As you pay down the balance — or as the home’s value rises — your equity grows, and lenders generally cancel PMI once you owe about 78–80% of the original value. Putting 20% down skips it from day one; putting less means paying it for a while, which is a real cost to weigh against buying sooner.

A bigger versus a smaller down payment

More down means a smaller loan, a lower monthly payment, no PMI at 20%, often a better rate, and less total interest. Less down means you keep more cash on hand and get into a home sooner, but you borrow more, pay PMI, and shoulder a larger payment. Neither is universally “right.” A buyer in a fast-rising market may do better buying now with 5% down than waiting two years to reach 20% while prices climb; a buyer with stable prices and a healthy income might prefer to save more and borrow less. The point is to see the trade-off in numbers rather than chase a single rule of thumb.

How to read the table and chart

The table holds your home price fixed and runs it through five common down payments — 3%, 5%, 10%, 15% and 20%. For each, it shows the cash required, the resulting loan, whether PMI applies, and an illustrative monthly principal-and-interest payment at a fixed 6.5% over 30 years (taxes, insurance and PMI are extra). Read down the rows and you’ll watch the cash you need rise while the loan, the payment and the PMI burden fall — the whole trade-off on one screen.

The chart answers a different question: how long until you actually have the money. Tell it how much you save each month (and anything set aside already) and it plots your balance climbing as a smooth line, with a flat dashed line marking the goal. Where the two meet is your move-in horizon. Save more per month and the climbing line steepens, reaching the goal sooner; lower your target with a smaller down payment and the dashed line drops to meet you.

Related tools & guides

• Mortgage calculator — turn your loan amount into a full monthly payment with taxes, insurance and PMI.
• Affordability calculator — work backward from your income to the price (and down payment) you can realistically carry.
• Savings goal calculator — plan the monthly saving needed to hit your down-payment target by a date.

These figures are for planning and education, not financial advice. Loan programs, PMI rates and qualifying rules vary by lender — confirm the exact numbers with a mortgage professional before you commit.