Down Payment Calculator
Calculate how your down payment size affects your monthly mortgage payment, PMI costs, total interest paid, and loan-to-value ratio. Compare different down payment scenarios side by side.
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Down Payment Comparison
| Down % | Down Amt | Loan | Monthly P&I | PMI/mo | Total Interest |
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How Down Payments Work
A down payment is the upfront cash you put toward a home purchase. The rest is financed through a mortgage. In the United States, down payments typically range from 3% to 20% of the home's purchase price, though some loan programs (like VA loans) allow 0% down.
Why 20% Is the Magic Number
Putting 20% down eliminates the need for Private Mortgage Insurance (PMI), which typically costs 0.5% to 1.5% of the loan amount annually. On a $400,000 home, that's $133 to $400 per month in PMI alone. Reaching the 20% threshold saves thousands over the life of the loan.
Pros and Cons of a Larger Down Payment
Advantages: Lower monthly payments, no PMI requirement, lower interest rate (lenders offer better rates for lower LTV ratios), more equity from day one, and stronger offers in competitive markets.
Disadvantages: Ties up cash that could be invested elsewhere, longer time to save means potentially missing market opportunities, and less cash available for moving costs, repairs, or emergencies.
Loan-to-Value (LTV) Ratio
LTV is the loan amount divided by the home's appraised value. An 80% LTV (20% down) is the standard threshold for avoiding PMI. Lenders view lower LTV ratios as less risky, which can qualify you for better interest rates and terms.
Down Payment Assistance Programs
Many state and local governments offer down payment assistance for first-time homebuyers, including grants, forgivable loans, and matched savings programs. FHA loans require as little as 3.5% down, and USDA and VA loans may require no down payment at all.
Frequently Asked Questions
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How Down Payment Affects Your Mortgage
20%: No PMI. 10%: ~$150/month PMI. 3–5%: Higher costs but faster entry.