AstraCalculator

Down Payment Calculator

Enter a price and either a percentage or an amount you have saved. The answer includes the part people miss: what it costs every month to put down less than 20 percent.

$
%
% per year
years
% of the loan per year

Charged only below 20 percent down. It usually runs between 0.3 and 1.5 percent depending on your credit and how little you put down.

$

Optional. Enter what you have put aside to see how far off you are.

How the math works

Down payment = home price x the percentage. Loan amount = price - down payment. Mortgage insurance = loan amount x its yearly rate, divided by 12, charged only while you are below 20 percent equity. Closing costs are estimated at 2 to 5 percent of the price and are separate from the down payment.

Common questions

Do I really need 20 percent down?
No. Conventional loans go to 3 percent, FHA to 3.5, and VA and USDA loans to zero for those who qualify. Twenty percent is not a requirement, it is the point at which mortgage insurance stops - which is why everyone repeats it.
What is PMI and when does it stop?
Private mortgage insurance protects the lender if you default. On a conventional loan you can request it be cancelled once you reach 20 percent equity, and it must be removed automatically at 22 percent. FHA loans are different: on most of them the premium lasts the life of the loan and the only way out is refinancing.
Is it better to put down more or keep the cash?
It depends on your rate and your safety net. A larger down payment is a guaranteed saving at your mortgage rate, which is hard to beat. But being house-rich and cash-poor is how a broken furnace becomes credit card debt. Keep several months of expenses back before stretching the down payment.
Can the down payment be a gift?
Yes, from a family member on most loan programs. The lender will require a gift letter stating it is not a loan, and will want to see the money seasoned in your account. Do not deposit a large unexplained sum shortly before applying.
What are closing costs?
Loan origination, appraisal, title insurance, recording fees, prepaid property tax and insurance. Two to five percent of the price is the usual range. They are cash at closing and separate from the down payment, which is why this page shows both.
Does a bigger down payment get me a better rate?
Often a little. Lenders price by loan-to-value ratio, and crossing 80 percent, and sometimes 75, can shave an eighth or a quarter of a point. The saving from dropping mortgage insurance is usually much larger than the rate change.

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