Down Payment Calculator
This down payment calculator shows how much cash you need to buy a home and whether your down payment will trigger private mortgage insurance (PMI). Enter your home price and down payment percent in the calculator above. It returns your down payment amount, your loan amount, and your loan-to-value (LTV) ratio. Here is a key surprise: you do not need 20% down. Conventional loans can go as low as 3%, and FHA loans start at 3.5%. But putting down less than 20% on a conventional loan usually means paying PMI until you build enough equity.
How it's calculated
The down payment calculator above uses two numbers: your home price and your down payment percent. It multiplies them to find your down payment in dollars. It then subtracts that from the price to show your loan amount. Finally, it divides the loan amount by the price to find your LTV ratio.
LTV is the figure lenders watch most. A 20% down payment means an 80% LTV, which avoids PMI on a conventional loan. Anything under 20% down pushes your LTV above 80% and usually adds PMI. Once you have a price in mind, see how much you can borrow with the home affordability calculator, and budget the rest with the closing cost calculator.
A worked example
Say you are buying a $400,000 home and put 10% down. Your down payment is $40,000, leaving a loan amount of $360,000. That puts your loan-to-value ratio at 90%. Because that is under 20% down, PMI is likely. If you could put down $40,000 more, your total down payment would reach $80,000, or 20%. That larger down payment would avoid PMI and lower both your loan and your lifetime interest.
Common mistakes to avoid
- Assuming you must put 20% down. Conventional loans go as low as 3%, and FHA loans start at 3.5%. You can buy with far less.
- Forgetting that under 20% down usually means PMI. This extra cost is added to your monthly payment until you reach 20% equity.
- Budgeting only for the down payment. Closing costs are separate and due at the same time. Estimate them with the closing cost calculator.
- Treating PMI as permanent. You can request cancellation at 80% LTV, and it auto-terminates at 78% LTV under federal law.
- Draining all your savings into the down payment. Leave a cushion for moving, repairs, and emergencies after closing.
Frequently asked questions
How much down payment do I need?
It depends on your loan type. Conventional loans can require as little as 3% down, and FHA loans require at least 3.5%. Use the down payment calculator above to turn a percent into a dollar amount for your home price. A 20% down payment is the threshold that avoids PMI on a conventional loan, but it is not required to buy.
Does a down payment under 20% mean I pay PMI?
Usually, yes. On a conventional loan, a down payment under 20% means your loan-to-value is above 80%, so lenders typically require private mortgage insurance (PMI). PMI protects the lender, not you. It is added to your monthly payment until you build enough equity to remove it.
When can I stop paying PMI?
You can request PMI cancellation in writing once your balance is scheduled to reach 80% of the home's original value. Your servicer must also automatically terminate PMI at 78% of the original value, as long as you are current on payments. This rule comes from the federal Homeowners Protection Act.
Why does a bigger down payment cost less over time?
A bigger down payment lowers your loan amount, so you borrow less and pay interest on a smaller balance. Reaching 20% down also avoids PMI entirely. Together, that reduces both your monthly payment and the total interest you pay over the life of the loan.