Down Payment Calculator

A down payment is the initial sum of money you pay up front when you’re buying a house. It’s the difference between the purchase price and your home loan. Use this calculator to understand the effect of different down payment amounts on your mortgage and the impact on your overall finances. 

Complete the information in the calculator fields:

• Enter the minimum amount you could put down 
• Enter the maximum amount you could put down 
• Enter the purchase price of the home 
• Use the drop-down menu to choose your loan term 
• Enter your estimated interest rate – find current average rates
• Estimate the percentage interest your down payment amount could earn if you invested it instead of using it to buy a home 
• Enter your combined state and federal tax rate 

Click the CALCULATE button. 

The display will show you two monthly payments based on the minimum and maximum amounts you entered, and the amount that a higher down payment will save in interest over the life of your loan. 

By trying different down payment amounts you can see the monthly impact on your payments and the cost over time, but there’s more to a down payment than simple dollars. Keep reading to learn more.  

You may have heard that you must make a 20% down payment to buy a house. That’s not true. There are loans with down payments as low as 3%, 3.5% and 5%. (There are even 0% down loans, such as VA and USDA, if you qualify for them.)   

What is true is that if you put down less than 20% you’ll usually have to pay monthly mortgage insurance (MI). This may also be called private mortgage insurance (PMI) or mortgage insurance premium (MIP), depending on the type of loan. The purpose of MI/PMI/MIP is to protect the mortgage lender from the higher risk of lending a greater percentage of the value of the property. 

The most common low down payment mortgage is an FHA loan, backed by the Federal Housing Administration, with a down payment as low as 3.5%. This loan is a popular choice for first-time homebuyers and credit-challenged buyers. The tradeoff is that you’ll have to pay FHA mortgage insurance (known as MIP —mortgage insurance premium), both as an upfront amount at closing and as a monthly premium. There are different rules governing when or even if you can cancel your MIP, but if you put down less than 10% it continues for the life of the loan. Of course once you have enough equity (ownership value) in your home, you could refinance to a conventional loan without MI. 

If you can afford a larger down payment of 20% or more for a conventional mortgage, you’ll have a lower monthly mortgage payment. You’ll also have a better loan-to-value (LTV) ratio, which makes you a less risky borrower and could result in a better interest rate. And of course you’ll avoid monthly MI.