Down Payment Calculator
Calculate your down payment amount and see if you'll need PMI.
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No PMI: With 20% or more down, you won't need PMI, saving you money monthly.
What is a down payment?
A down payment is the share of the home's purchase price you pay upfront in cash, with the remainder financed by your mortgage. It is the single largest line item in your cash-to-close, and it sets three things at once: how much you borrow, whether you pay for mortgage insurance, and how much total interest you will hand the lender over 360 payments. On a $400,000 home, 20% down is $80,000 — a figure most first-time buyers do not have, which is why lending programs exist at 3%, 3.5%, and 0%.
The 20% benchmark is not an underwriting requirement; it is the threshold at which a conventional loan stops carrying private mortgage insurance. Below it, your loan-to-value ratio sits above 80% and the lender transfers that risk to an insurer and bills you for it, typically 0.5% to 1.5% of the loan amount a year. Above it, the premium disappears entirely and your pricing improves at the same moment. That single percentage point — $320,000 financed instead of $380,000 — changes the monthly payment, the cash requirement, and the interest bill together.
The trade-off runs in both directions. A larger down payment lowers the balance, lowers the payment, removes PMI, and cuts lifetime interest, but it consumes liquidity you may need for the appraisal, moving costs, repairs, and the six-month payment reserve that separates a survivable job gap from a forced sale. A smaller down payment preserves that reserve and puts you in the house sooner, at the cost of a higher payment, a mortgage insurance premium, and more interest per dollar borrowed — each additional $20,000 financed adds $126.41 to the monthly payment and $25,509 of interest over the life of a 30-year loan at 6.5%.
Program minimums vary widely: conventional loans run 3% to 20%, FHA requires 3.5% with a 580 credit score, and VA and USDA loans require nothing down for borrowers who qualify. The calculator above runs each percentage against your price point so you can see both numbers — cash today and payment forever — before you write the offer.
How to use this calculator
- Enter the home purchase price.
- Enter your planned down payment in dollars, or pick a percentage and let it fill in the amount.
- Add the interest rate, term, and your credit score so the PMI estimate reflects your profile rather than a flat average.
- Review the loan amount, which is simply the price minus the down payment.
- Click Calculate to see the loan amount, monthly principal and interest payment, estimated PMI cost, and the total closing cash needed.
A realistic set of inputs for a $400,000 home: down payment $20,000 (5%), which finances $380,000; rate 6.5% over 360 months, the benchmark used in every worked example on this page; credit score 720, which prices PMI near 0.45% to 0.70% of the loan. The result is a principal-and-interest payment of $2,401.86, PMI of roughly $221.67 a month at 0.70%, and closing costs of 3% to 5% on the $380,000 loan — $11,400 to $19,000. Add those to the $20,000 down payment and you need $31,400 to $39,000 in cash, which is the number most buyers get wrong. Raise the down payment to 20% ($80,000) and the loan falls to $320,000, the payment to $2,022.62, PMI to zero, and cash to close to $89,600–$96,000.
How your down payment is calculated
Two arithmetic steps produce the loan, and a third turns the loan into a payment. The down payment itself is the purchase price multiplied by the percentage you choose; the loan is whatever is left; the payment is the standard amortization calculation applied to that balance at your rate and term.
Down payment = price × percentage and Loan = price − down payment, then M = P × [ i (1 + i)n ] ÷ [ (1 + i)n − 1 ], where i is the annual rate ÷ 12 and n is the number of monthly payments.
Worked example: $400,000 home at 5% down, 6.5%, 30 years
Step 1: 400,000 × 0.05 = $20,000 down payment. Step 2: 400,000 − 20,000 = $380,000 loan, which is a 95% loan-to-value ratio. Step 3: the monthly rate is 6.5% ÷ 12 = 0.005416667 and n = 360, so the payment factor is $6.320675 per $1,000 borrowed. Step 4: 380,000 ÷ 1,000 × 6.320675 = $2,401.86 a month.
Step 5: lifetime interest is 2,401.86 × 360 − 380,000 = $484,669. Step 6: repeat the same arithmetic at 20% down — 400,000 × 0.20 = $80,000, loan $320,000, 320,000 ÷ 1,000 × 6.320675 = $2,022.62 a month, interest 2,022.62 × 360 − 320,000 = $408,142. The difference between the two structures is $80,000 of cash today, $379.24 a month in payment, and $76,527 of interest across 30 years. Step 7: add PMI to the 5% version — 0.007 × 380,000 ÷ 12 = $221.67 a month — and the true gap is $600.91 a month, not $379.24.
Worked scenarios
Everything below holds the price at $400,000 and the rate at 6.5% so the only variable is how much cash you bring. Principal and interest only; taxes, insurance, and PMI are separate lines.
Down payment scenarios: $400,000 home at 6.50%, 30-year term
| Down payment | Cash down | Loan amount | Monthly P&I | PMI at 0.70% | Total interest |
|---|---|---|---|---|---|
| 3% | $12,000 | $388,000 | $2,452.42 | $226.33 | $494,873 |
| 5% | $20,000 | $380,000 | $2,401.86 | $221.67 | $484,669 |
| 10% | $40,000 | $360,000 | $2,275.44 | $210.00 | $459,160 |
| 15% | $60,000 | $340,000 | $2,149.03 | $198.33 | $433,651 |
| 20% | $80,000 | $320,000 | $2,022.62 | $0 | $408,142 |
Each step of 5% is exactly $20,000 of price, which is exactly $20,000 less borrowed, which is exactly $126.41 less a month and $25,509 less interest. Five of those steps from 5% to 20% compound to $379.24 a month and $76,527 of interest — and the last step also erases the $221.67 PMI line, so the practical difference between the 5%-down and 20%-down versions of the same house is $600.91 every month.
Minimum down payment by loan program: $400,000 home
| Program | Minimum | Cash down | Loan amount | Credit requirement |
|---|---|---|---|---|
| Conventional, first-time buyer program | 3% | $12,000 | $388,000 | 620+ FICO |
| Conventional, standard | 5% | $20,000 | $380,000 | 620+ FICO |
| FHA | 3.5% | $14,000 | $386,000 | 580+ FICO (500–579 needs 10% — $40,000) |
| VA | 0% | $0 | $400,000 | Service eligibility; 2.15% funding fee financed |
| USDA | 0% | $0 | $400,000 | Rural location and income limits; 1% upfront fee |
Three of the five programs let you in for less than the price of a used car. The catch is never the down payment alone: the FHA loan at 3.5% carries a mortgage insurance premium for the life of the loan when you put down less than 10%, VA charges a funding fee of 2.15% that most borrowers finance ($8,600 on $400,000), and USDA adds a 1% upfront guarantee fee. Compare the programs in the FHA loan calculator and the VA loan calculator before assuming the lowest cash requirement is the cheapest loan.
Loan amount, PMI, and the cost of waiting for 20%
| Structure | Cash down | Loan | Monthly P&I | Monthly PMI | Payment until PMI ends |
|---|---|---|---|---|---|
| 5% down, single loan | $20,000 | $380,000 | $2,401.86 | $221.67 | $2,623.53 |
| 10% down, single loan | $40,000 | $360,000 | $2,275.44 | $210.00 | $2,485.44 |
| 20% down, single loan | $80,000 | $320,000 | $2,022.62 | $0 | $2,022.62 |
| 80/10/10 piggyback | $40,000 | $320,000 + $40,000 | $2,022.62 + $300 interest-only | $0 | $2,322.62 |
The piggyback row is the standard workaround: 10% down, an 80% first mortgage at 6.5%, and a 10% second loan at 9% interest-only ($40,000 × 0.09 ÷ 12 = $300). It reaches $2,322.62 — $163 cheaper than the 10% single loan with PMI and $301 cheaper than 5% down — but the second payment never amortizes and its rate resets if it is a HELOC. Run the structure through the home equity calculator if the second is a line of credit.
Down payment requirements and thresholds
- Conventional, 3% minimum: available through Fannie Mae and Freddie Mac first-time buyer programs on a primary residence — $12,000 on a $400,000 home. Standard conventional pricing starts at 5% down ($20,000).
- Conventional, 20% to drop PMI: $80,000 on a $400,000 home, taking the loan to $320,000 and the LTV to 80%. This is the only threshold that eliminates private mortgage insurance outright.
- FHA, 3.5%: $14,000 on a $400,000 home with a 580 or higher FICO. Scores from 500 to 579 require 10% down — $40,000. FHA also charges 1.75% upfront MIP ($6,755 on a $386,000 loan) that is financed into the balance.
- VA, 0%: no down payment for eligible service members and veterans. The funding fee is 2.15% on a first use with no money down ($8,600 on $400,000), dropping to 1.5% with 5% to 9.99% down and 1.25% at 10% or more. Borrowers with a service-connected disability are exempt.
- USDA, 0%: no down payment in eligible rural areas with household income under the county limit. A 1% upfront guarantee fee applies, financed into the loan.
- PMI at every step below 20%: 0.5% to 1.5% of the loan amount a year. On the $380,000 loan above that is $158.33 to $475.00 a month, and it can be requested for removal once the balance reaches 80% of the original value — $320,000, reached in payment 124 at 6.5%.
- Cash to close is down payment plus closing costs: 3% to 5% of the loan for a purchase. At 5% down that is $20,000 + $11,400–$19,000 = $31,400–$39,000; at 20% down it is $80,000 + $9,600–$16,000 = $89,600–$96,000.
- Gift funds are allowed: conventional, FHA, VA, and USDA all permit down payments gifted by family, with a signed letter stating the relationship and that repayment is not expected. The donor's deposit must be documented.
Down payment tips for 2026
- Set the reserve floor before you set the down payment target. Six months of the full housing payment — about $15,741 on this example's $2,623.53 total — stays in the bank no matter what. A down payment that empties the account to hit 20% trades a $221.67 PMI premium for a real risk of selling under duress.
- Buy the 20% with math, not with guilt. Going from 5% to 20% on a $400,000 home costs $60,000 of extra cash to save $379.24 of principal and interest plus $221.67 of PMI — $600.91 a month, or 99 months of break-even. If you expect to hold the home past year eight, the 20% wins; if the purchase is short-term, the cash usually does more work elsewhere.
- Stack assistance on top of your own savings. Most states and many cities offer grants or forgivable second mortgages for first-time buyers, often 3% to 5% of the purchase price. Income limits and homebuyer education courses are the usual conditions, and the application takes weeks — start it before you tour homes.
- Use gift funds correctly the first time. Get a signed gift letter naming the donor, the relationship, and confirmation that no repayment is expected, and have the money deposited before the lender's documentation cutoff. A gift moved late in the process is the most common reason a file gets delayed at underwriting.
- Price the loan-level price adjustments before choosing the percentage. A 95% LTV loan carries a higher price than an 80% LTV loan — routinely a quarter to a half point of price, which shows up as a higher rate or discount points. Sometimes putting 10% down instead of 5% costs little cash and improves the rate enough to pay for itself in under three years.
- Do not drain retirement accounts to reach 20%. A 401(k) withdrawal triggers income tax plus a 10% penalty if you are under 59½, and a loan against the account counts as monthly debt in your DTI calculation — often enough to push a marginal approval over the line. Check the effect in the debt-to-income calculator first.
- Keep the price flexible, not just the down payment. A $5,000 price reduction removes $5,000 from the loan, lowers the payment by $31.60 a month, and cuts $6,377 of interest — plus it lowers your closing costs, which run off the loan amount. A cheaper house and a smaller down payment solve the same cash problem from different directions.
Common mistakes with down payments
- Saving only the down payment. A $400,000 purchase at 5% down needs $20,000 plus $11,400 to $19,000 of closing costs and moving expenses. Buyers who stop saving at the 20% mark show up at closing short by five figures, with no legitimate way to add funds at the last minute.
- Assuming 20% is required. It is not required by any loan program; it is the point where conventional PMI ends. Waiting years to reach it can cost more in rent and rising prices than the premium you were avoiding — on a $380,000 loan at 0.70%, PMI is $221.67 a month, while home prices rising 4% on a $400,000 house is $16,000 a year.
- Comparing programs on down payment alone. FHA's 3.5% beats conventional's 5% on cash, but FHA adds upfront MIP of 1.75% and annual premium for the life of the loan below 10% down. On the $386,000 FHA loan the annual MIP at 0.55% is $176.92 a month, versus $221.67 of cancellable PMI on a conventional loan — run both through the FHA calculator.
- Ignoring the escrow and prepaid bills that come with the loan. Property taxes and homeowners insurance are collected at settlement and every month after. A payment quoted as $2,401.86 becomes $3,069.94 once you add $416.67 of tax and $125 of insurance on a $500,000 property at 1.0%.
- Putting every spare dollar down instead of keeping reserves. The marginal 5% saves $126.41 a month. A $600 repair, a job gap, or a tax bill with no cash behind it can force a sale that costs far more than the saving. Fund six months of payments first, then optimize the balance.
- Changing jobs, cars, or credit between the offer and closing. A new $400-a-month car payment is 3.3 percentage points of debt-to-income on a $12,000 gross monthly income, and a job change can void an approval built on two years of W-2 history. Freeze new credit from pre-approval through funding.
Frequently asked questions
How much should I put down on a house? The right amount is the largest down payment that still leaves six months of housing payments in reserve. For most conventional buyers that lands between 5% and 10%; on a $400,000 home that is $20,000 to $40,000 plus 3% to 5% of the loan for closing costs. VA and USDA borrowers can put nothing down without insurance penalties.
Is a 20% down payment required? No. Conventional loans allow 3% down, FHA allows 3.5% with a 580 credit score, and VA and USDA loans allow 0%. The 20% figure matters because it is where conventional private mortgage insurance ends — at 80% loan-to-value, a $400,000 home with $80,000 down finances $320,000 and no premium.
What happens if I put down less than 20%? You pay private mortgage insurance, which runs 0.5% to 1.5% of the loan amount a year — $158 to $475 a month on a $380,000 loan. You can request cancellation once you reach 80% of the original value, and your servicer must cancel it automatically at 78%, which on a $400,000 purchase means a $320,000 balance.
How much is a down payment on a $400,000 home? 3% is $12,000, 5% is $20,000, 10% is $40,000, and 20% is $80,000. Each 5% step is exactly $20,000, which reduces the loan by $20,000 and the monthly payment by $126.41 at 6.5% over 30 years. Add 3% to 5% of the loan amount for closing costs on top.
What credit score do I need for a low down payment? Conventional 3% and 5% programs generally require 620 or higher. FHA accepts 580 with 3.5% down and 500 to 579 with 10% down. VA and USDA lenders commonly want 620 or better, though neither program publishes a hard minimum, and VA has no DTI ceiling — only a residual income test.
Should I put more down or keep cash in reserve? Keep the reserve. The extra 5% on a $400,000 home saves $600.91 a month including PMI, which sounds decisive until a job loss forces a sale of a house with no equity buffer. Pay off higher-interest debt first, fund six months of payments, then direct the remainder at the balance.
Does a bigger down payment get me a better interest rate? It improves pricing. Loan-level price adjustments charge higher LTVs more, so moving from 95% to 80% LTV commonly improves the price by a quarter to a half point — worth roughly $31 to $62 a month on a $380,000 loan. Ask lenders to quote both structures the same day so you can see the actual spread.
Can I use a gift for my entire down payment? Yes, on conventional, FHA, VA, and USDA loans, provided the donor signs a letter confirming the gift is not repayable and the transfer is documented. Season large deposits early — funds arriving in the last two weeks before closing trigger a paper trail requirement that can delay settlement.