Down Payment Calculator

Q: How much should I put down on a house?

The traditional advice is to put down 20% of the home's purchase price to avoid Private Mortgage Insurance (PMI), qualify for better interest rates, and gain instant home equity. However, many loan programs, such as FHA loans (3.5% down) or VA/USDA loans (0% down for eligible buyers), allow for much lower down payments.

Q: What is PMI (Private Mortgage Insurance)?

Private Mortgage Insurance (PMI) is insurance that protects the lender if you default on your loan. It is typically required on conventional loans when your down payment is less than 20% of the home's price. PMI is usually paid as a monthly premium included in your mortgage payment until you reach at least 20% equity.

Q: Can I get a mortgage with less than a 20% down payment?

Yes, absolutely. Many loan options exist for buyers with less than 20% down. FHA loans require as little as 3.5%, VA and USDA loans can require 0% down for qualified borrowers, and many conventional loans are available with 3-5% down, although they will require PMI.

Q: Does a bigger down payment lower my monthly payment?

Yes. A bigger down payment reduces the total amount you need to borrow (the principal loan amount). A smaller loan results in a lower monthly payment for principal and interest. It can also help you avoid PMI, further reducing your monthly housing cost.

Q: What is included in a monthly mortgage payment?

A typical monthly mortgage payment, often called PITI, includes four main components: Principal (the amount that goes toward paying down your loan balance), Interest (the cost of borrowing the money), Taxes (your property taxes, held in escrow), and Insurance (homeowner's insurance, also held in escrow). If your down payment is less than 20%, it may also include PMI.

Instantly see how your down payment impacts your loan and total monthly costs.

Home Price

Down Payment

Loan Term (Years)

Interest Rate (APR)

Property Tax (Annual)

Home Insurance (Annual)

PMI (Annual % of Loan)

Estimated Monthly Payment

$0.00

Principal & Interest:$0.00

Property Tax:$0.00

Home Insurance:$0.00

PMI:$0.00

Total Loan Amount:

How to Use Our Down Payment Calculator

Getting a clear picture of your potential mortgage is simple. Follow these steps to empower your home-buying journey:

Enter the Home Price: Start with the price of the property you're interested in.
Set Your Down Payment: You can enter a percentage of the home price or a specific dollar amount. The calculator will automatically sync the two fields. Experiment with different amounts to see the impact.
Choose a Loan Term: Select a 30, 20, or 15-year loan term. A shorter term means higher monthly payments but less interest paid over time.
Input the Interest Rate: Enter the estimated Annual Percentage Rate (APR) you anticipate. Check current mortgage rates online for a realistic number.
Add Annual Costs: For the most accurate estimate of your monthly payment, include your area's annual property taxes, your estimated annual homeowner's insurance premium, and the PMI rate if your down payment is under 20%. A common PMI rate is between 0.5% and 1% of the loan amount per year.

Understanding Your Down Payment's Impact

A down payment is the cash you pay upfront when buying a home, and it's one of the most significant factors in your mortgage. The size of your down payment directly influences your loan amount, monthly payments, and the overall cost of your home loan. This calculator is designed to demystify these connections, helping you plan and save effectively.

Why the 20% Down Payment Rule Matters

The 20% down payment benchmark is a long-standing piece of financial advice for good reason. Meeting this goal provides several powerful advantages:

Avoid Private Mortgage Insurance (PMI): This is the biggest benefit. Lenders require PMI on conventional loans when the down payment is less than 20% to protect themselves in case of default. Eliminating this extra monthly cost can save you hundreds of dollars each month.
Lower Your Monthly Payments: A larger down payment means a smaller loan. A smaller loan principal directly translates to a lower monthly payment for principal and interest.
Secure a Better Interest Rate: Lenders view a large down payment as a sign of financial stability, making you a less risky borrower. This can often lead to a lower interest rate, saving you thousands over the life of the loan.
Build Instant Equity: Equity is the portion of your home that you truly own. A 20% down payment means you start with a significant equity stake, giving you more financial flexibility from day one.

While 20% is the goal, it's not always achievable. Don't be discouraged! Many buyers succeed with less. Explore options with our FHA Loan Calculator for low-down-payment scenarios, and see a full payment schedule for any loan with our Amortization Calculator. Before you search, get a realistic budget with the House Affordability Calculator.

Key Factors That Change By Location

Remember that some housing costs vary significantly depending on where you live. For the most accurate calculation, research local rates for the following:

Property Taxes: These are set by local governments and can differ dramatically from one county or state to another.
Homeowner's Insurance: Premiums are based on local risks such as weather events (hurricanes, tornadoes), crime rates, and construction costs.

Frequently Asked Questions

How much should I put down on a house?

The traditional advice is 20% to avoid PMI and secure better loan terms. However, options like FHA (3.5% down) and conventional loans (as low as 3% down) make homeownership accessible with less cash upfront.

What is PMI (Private Mortgage Insurance)?

PMI is insurance that protects your lender if you have a low down payment (under 20%) and stop making payments. It does not protect you. The cost is added to your monthly mortgage payment.

Can I get a mortgage with less than a 20% down payment?

Yes. A wide range of loan products are available for this purpose. FHA loans, VA loans (for veterans), USDA loans (for rural areas), and conventional 97 loans are all designed for buyers with smaller down payments.

Does a bigger down payment lower my monthly payment?

Yes, significantly. A larger down payment reduces your loan principal, which lowers the principal and interest portion of your payment. It can also eliminate the need for PMI, reducing your payment even further.

What is included in a monthly mortgage payment?

Often called PITI, it includes: Principal (reduces loan balance), Interest (cost to borrow), Taxes (property taxes), and Insurance (homeowner's insurance). It can also include PMI if applicable.