Down Payment Calculator

A down payment is the upfront cash payment you make when purchasing a home — the portion of the purchase price not covered by your mortgage. Saving enough for a down payment is one of the largest financial milestones most people face.

Key formulas: Down Payment Amount = Home Price × Down Payment % Loan Amount = Home Price − Down Payment Amount Monthly Savings Needed = (Target Down Payment − Current Savings) ÷ Months Until Purchase LTV Ratio = Loan Amount ÷ Home Price × 100

What each variable means:

• Down Payment %: the fraction of the home price paid in cash upfront. Common targets: 3%, 5%, 10%, 20%.
• Loan Amount (Principal): what you borrow from the lender. Lower is always better for long-term interest cost.
• LTV (Loan-to-Value) Ratio: the loan as a percentage of the home’s value. Below 80% LTV typically eliminates the need for PMI.
• PMI (Private Mortgage Insurance): required by most conventional lenders when LTV > 80%. Costs 0.5–1.5% of loan amount per year, added to monthly payments.

Down payment benchmarks and their implications:

• 3%: minimum for many conventional loans (first-time buyers). High PMI.
• 5%: FHA-style programs. PMI still required.
• 10%: lower PMI, better mortgage rates.
• 20%: no PMI required. Best rates. Industry standard goal.

Worked example: Home price: $400,000. Target: 20% down. Down payment = $80,000. Current savings: $32,000. Gap = $48,000. Timeline: 4 years (48 months). Monthly savings needed = $48,000 ÷ 48 = $1,000/month.

Adding 4% annual interest to savings via a HYSA or CD reduces the needed savings to roughly $880/month thanks to compounding.

Closing costs reminder: Budget an additional 2–5% of the purchase price for closing costs (title insurance, appraisal, origination fees) — these are due at closing alongside the down payment.