Down Payment Calculator

How It Works

Your down payment does three things at once, and all three push your monthly payment in the same direction. First, it shrinks the loan: a $40,000 down payment on a $400,000 home means borrowing $360,000 instead of $400,000, and a smaller loan means a smaller principal-and-interest payment. Second, it changes whether you pay private mortgage insurance. On a conventional loan, PMI is usually required when the down payment is under 20% of the price, and it is charged as a percentage of the loan each year — typically 0.5% to 1%. Third, it changes the total interest you pay over the life of the loan, because interest is charged on the balance you owe.

This calculator works out all three effects from the numbers you enter. The down payment in dollars and as a percentage stay in sync, so you can test any level. The monthly principal-and-interest payment comes from the standard amortization formula, PMI is estimated from the annual rate you enter (applied only below 20% down), and property tax and insurance are added monthly to give the full payment. The PMI rate is yours to change: enter your lender's quote if you have one, or 0 if your loan will not carry PMI.

Worked Example

Take a $400,000 home at 7.11% over 30 years, with property tax of $4,800 a year and insurance of $1,800 a year. With 10% down ($40,000), the loan is $360,000, principal and interest are $2,421.74 a month, and PMI at 0.5% a year adds $150.00 a month. With tax ($400) and insurance ($150), the total monthly payment is $3,121.74. With 20% down ($80,000), the loan falls to $320,000, principal and interest fall to $2,152.66, PMI disappears entirely, and the total payment is $2,702.66 — $419.08 a month less. The extra $40,000 of down payment buys a lower payment twice over: once through the smaller loan, once through the dropped PMI.

The lifetime difference is larger still. At 10% down you would pay $511,827.47 of interest over 30 years; at 20% down, $454,957.75. That is $56,869.72 less interest — and that is before counting the PMI, which at 10% down costs $150.00 a month until the loan balance reaches 80% of the home's value. The 20% line is not magic, but it is the point where the maths changes in your favour on every front at once.

Assumptions

• PMI is estimated at the annual rate you enter (default 0.5% of the loan per year) and applies only when the down payment is under 20%. Real PMI rates depend on your credit score, loan type and down payment, and typically run 0.5% to 1% a year.
• The interest rate stays fixed for the full loan term.
• Property tax and homeowners insurance stay constant; both usually rise over time.
• PMI is shown at its starting monthly amount. In reality PMI is recalculated as the balance falls and ends once the balance reaches 80% of the home's value (or 78% for automatic termination on most conventional loans).
• No HOA dues, closing costs or other fees are included.

What this calculator leaves out: the opportunity cost of the down payment (money put into the house is not invested elsewhere), the tax treatment of mortgage interest, and loan programs with their own rules — FHA loans use MIP instead of PMI, VA loans charge a funding fee and no monthly insurance, and some conventional programs allow 3% down.

The table below shows the same $400,000 home at 7.11% over 30 years at six down payment levels, with tax of $4,800 a year and insurance of $1,800 a year included in the total:

Notice the step between 15% and 20%: the total payment falls by $276.21 a month, far more than the $142.87 step from 10% to 15%, because PMI drops off at the same time as the loan shrinks. Above 20%, each extra 5% of down payment saves a steady $134.54 a month — the loan effect alone.

How to Use This Calculator

Enter the home price, then set your down payment in dollars or as a percentage — the two fields stay in sync, so changing one updates the other. Set the interest rate and loan term, then the PMI rate: the 0.5% default is a reasonable planning figure, but if your lender has quoted you a rate, use that instead. Add annual property tax and insurance to see the full monthly payment rather than just principal and interest.

Then compare levels. The most useful comparison is usually between the down payment you can afford now and the 20% level: the calculator shows exactly what waiting and saving more would buy you each month, and how much interest it would save over the life of the loan. That is the trade-off to weigh against the cost of waiting — rent paid in the meantime, and the chance that prices or rates move while you save.

Tips and Practical Advice

Do not empty your savings to reach 20%. A down payment that leaves you with no emergency fund is a risk: the first broken furnace or lost job after closing becomes a crisis, and at 7% interest a crisis usually lands on a credit card. Keep three to six months of expenses in reserve after the down payment and closing costs, even if that means a smaller down payment and some PMI.

If you do pay PMI, remember it is not forever. On a conventional loan you can usually ask your servicer to cancel PMI once your balance falls to 80% of the home's original value, and it must be cancelled automatically at 78% on most loans. Extra principal payments and rising home values both get you there sooner — and if your home appreciates, a new appraisal can prove the equity even if the balance has not fallen that far.

Finally, check whether a low-down-payment program fits you better than saving for 20%. FHA loans allow 3.5% down, VA loans allow 0% down for eligible veterans, and some conventional programs allow 3% down. Each has its own insurance or fee structure, so run the numbers for your situation rather than assuming 20% is the only sensible target.

Sources: Freddie Mac Primary Mortgage Market Survey, week ending Nov 12, 2026 (30-year fixed 7.11%). PMI estimated at 0.5% of the loan per year; the typical range is 0.5–1% per year. Last reviewed: 13 November 2026.

Frequently Asked Questions