Down Payment Calculator

A 20% down payment is the number most people have heard of, but it isn’t a requirement — it’s the threshold that lets you skip private mortgage insurance (PMI). Conventional loans allow as little as 3%, FHA loans allow 3.5%, and VA loans can require $0 down for eligible veterans. On a $350,000 home, that range spans from $10,500 to $70,000 — a gap that changes your monthly payment, your loan approval odds, and how fast you build equity. This calculator shows exactly what each scenario costs you.

How the Down Payment Calculator Works

Enter the home price and a down payment percentage (or a dollar amount), and the calculator returns your loan amount, loan-to-value ratio, and whether PMI applies. It’s a simple calculation on the surface — down payment subtracted from price equals loan amount — but the number that matters most is the loan-to-value ratio (LTV), because that single figure determines your PMI requirement, your interest rate tier, and in some cases whether you qualify for a loan program at all.

Once you know your loan amount here, run it through the full Mortgage Calculator to see your actual monthly payment with taxes, insurance, and PMI included — this tool intentionally isolates the down payment decision so you can compare scenarios quickly before moving to the complete picture.

Why 20% Is a Threshold, Not a Rule

Below 20% down, conventional lenders require PMI — typically 0.5% to 1.5% of the loan amount per year — as protection against default risk on a smaller equity cushion. PMI isn’t permanent: it’s usually removable once your loan balance drops to 78-80% of the home’s original value, either through payments or appreciation. That means a lower down payment today doesn’t lock you into PMI forever, but it does mean higher monthly costs in the years before you cross that line.

The real question isn’t “can I avoid PMI” — it’s whether the cost of PMI is smaller than what you’d give up by delaying your purchase to save a larger down payment, especially in a market where home prices are rising faster than you can save. Run both scenarios through the House Affordability Calculator to see how your maximum purchase price shifts at 5%, 10%, and 20% down.

Low Down Payment Programs Worth Comparing

If a 20% down payment isn’t realistic on your timeline, several programs exist specifically to lower that barrier:

• FHA loans allow down payments as low as 3.5% with more flexible credit requirements than conventional financing, though they carry both an upfront and an ongoing mortgage insurance premium that doesn’t cancel the same way conventional PMI does. Full numbers are in the FHA Loan Calculator.
• VA loans, available to eligible veterans and active-duty service members, often require no down payment at all and carry no PMI — a combination that changes the affordability math significantly. See exact figures in the VA Mortgage Calculator.
• Conventional 3% programs exist for qualified first-time buyers, though PMI costs at this LTV tend to be higher than at 10% or 15% down.

Down Payment vs. Interest Rate: The Trade-Off Lenders Don’t Always Explain

A larger down payment doesn’t just reduce your loan size — it often unlocks a meaningfully better interest rate, because lenders price risk based on LTV tiers. Crossing from 15% down to 20% down, or from 10% to 20%, can move you into a lower rate bracket entirely, on top of eliminating PMI. That combined effect is easy to underestimate: two buyers with the same loan amount but different LTV ratios can have monthly payments that differ by more than the PMI alone would suggest. The Amortization Calculator lets you compare full payment schedules side by side at different rates to see the compounding effect over the life of the loan.

Where the Down Payment Money Should Come From

Cash savings is the most straightforward source, but it isn’t the only one. Gift funds from family, down payment assistance programs (often income-restricted and location-specific), and in some cases retirement account withdrawals are all common paths — each with different tax and paperwork implications a lender will ask about during underwriting. What lenders universally want to see is that the funds have been “seasoned” in your account for at least 60 days, since large, unexplained deposits right before closing routinely trigger additional documentation requests.

If you already own a home and are using its equity to fund a down payment on a new one, the Home Equity Loan Calculator shows how much you could realistically borrow against your current property before you sell it.

Should You Put Down More Than 20%?

Once you clear the PMI threshold, additional money down still lowers your monthly payment and total interest — but it also ties up cash that could otherwise sit in an emergency fund or be invested elsewhere. There’s no universal right answer here; it depends on your other financial priorities, how liquid you need to stay, and what returns you could realistically earn on that money elsewhere. If you’re weighing this decision against continuing to rent while you save more, the Rent vs. Buy Calculator models both paths using your actual numbers rather than a rule of thumb.

Already Own a Home? Down Payments Work Differently on a Refinance

If you’re not buying but refinancing an existing mortgage, the “down payment” concept is replaced by your current equity position, which determines whether you’ll pay PMI on the new loan and what rate you’ll qualify for. The Refinance Calculator handles that scenario directly, using your current loan balance and home value instead of a purchase price.

Frequently Asked Questions

What is the minimum down payment for a house?

Conventional loans allow as little as 3% for qualified first-time buyers. FHA loans require 3.5% minimum. VA loans, for eligible veterans and active-duty military, can require 0% down. USDA loans, for eligible rural properties, can also require 0% down.

Do I have to put 20% down to avoid PMI?

Yes, on a conventional loan, 20% down (an 80% loan-to-value ratio) is the standard threshold to avoid PMI entirely. Below that, PMI is added to your monthly payment but can typically be removed once your loan balance reaches 78-80% of the home’s original value.

Is it better to put more money down or invest the difference?

It depends on your mortgage rate versus your expected investment return, your tolerance for carrying debt, and how much liquidity you want to keep. A higher mortgage rate favors a larger down payment; a low, fixed rate combined with strong investment opportunities can favor investing the difference instead. There’s no single correct answer for every borrower.

Can I use gift money for a down payment?

Most loan programs allow gift funds from family members, but lenders will require a gift letter confirming the money doesn’t need to be repaid, along with documentation showing the funds have been in your account for a required period before closing.

How does my down payment affect my interest rate?

Lenders price loans in loan-to-value tiers, so crossing certain down payment thresholds — commonly 10%, 15%, and 20% — can qualify you for a lower interest rate in addition to reducing or eliminating PMI. The exact tiers and rate differences vary by lender.