What the down payment calculator does
The down payment calculator answers two questions at once: how much cash you need at closing and what loan size you'll be carrying. The percent and dollar fields are linked — type in either one and the other updates instantly. The 20% PMI threshold is highlighted on the slider, because crossing it changes whether you'll owe private mortgage insurance.
The math (it's simple)
- Down payment $ = Home price × Down payment %
- Loan amount = Home price − Down payment
- LTV (loan-to-value) ratio = Loan amount ÷ Home price
LTV is the figure lenders care about. PMI usually kicks in above 80% LTV on conventional loans — equivalent to under 20% down. Higher LTV also tends to mean a slightly higher mortgage rate.
The 20% rule — and when to ignore it
Putting 20% down is the textbook target because it avoids PMI, gets you the best rate sheet, and gives you instant equity. But the rule is not universal. In high-cost markets, saving 20% on a $750,000 home means $150,000 in cash — a wait of many years for most buyers. PMI is annoying, but it's not the end of the world: typical cost is 0.3-1.5% of the loan per year, and you can request removal once your equity reaches 20% (which happens faster in rising markets and with extra principal payments). For many first-time buyers, paying PMI for a few years and getting into the market is the better long-term move than waiting another half-decade to hit 20%.
Loan-program minimums
- Conventional: typically 3-5% minimum for first-time buyers, 5-10% for repeat buyers. PMI applies under 20%.
- FHA: 3.5% minimum with a 580+ credit score. Mortgage insurance (MIP) applies for the life of the loan in most cases.
- VA: 0% down for eligible veterans, active service members and surviving spouses. No PMI; a funding fee applies.
- USDA: 0% down for rural-area buyers under income limits. Annual fee applies in place of PMI.
- Jumbo: 10-20% typical, depending on lender and loan size.
Should you put more than 20% down?
That's an opportunity-cost question. Every dollar of extra down payment is a dollar you don't have invested elsewhere. If your mortgage rate is 7% and a high-yield savings account pays 4.5%, the math favours putting more down (or paying off the mortgage faster). If your rate is 3% and you can reasonably expect 7% in long-term stock investments, putting the minimum down and investing the difference has higher expected value — at the cost of more risk. Most buyers' answer sits somewhere in the middle, balancing the math with the emotional comfort of less debt.
Use with the rest of the toolkit
Once you've picked a down payment, plug the loan amount into the mortgage calculator for full PITI, or the amortization calculator for a per-payment breakdown. To compare cash-saving timelines, the savings calculator shows how long it takes to hit a target with regular deposits.