Down Payment Calculator — 5% to 20% compared

How it works

The down payment is the home price times your down-payment percentage, and the loan is what remains. The monthly principal-and-interest payment comes from the amortization formula M = P·r(1+r)ⁿ ⁄ ((1+r)ⁿ − 1), where P is that loan amount, r the monthly rate (the annual rate divided by 12), and n the number of payments. On a down payment under 20%, conventional loans add private mortgage insurance — estimated here from an adjustable rate assumption, 0.5% of the loan a year by default. PMI is not permanent: under federal rules you can request cancellation once the balance reaches 80% of the home's original value, and the servicer must end it automatically at 78% (CFPB). So a bigger down payment cuts the cost three ways: a smaller loan, less interest, and less time paying PMI. The standard options for one home price sit together so the trade-off between up-front cash and monthly cost is explicit.

Worked example

LibreTexts works a $250,000 loan at 5.5% over 15 years to a monthly payment of $2,042.71. Read as a purchase, that $250,000 is what you borrow after putting 20% down on a $312,500 home — $62,500 up front, and no PMI because you are already at 20% equity (the home price and down-payment figures are this page's arithmetic, not LibreTexts'). Drop to 10% down on the same home and the loan rises to $281,250, the payment climbs, and PMI is added on top — so each standard down payment trades up-front cash against monthly cost.

Frequently asked questions

What is a down payment?

It is the portion of a home's price you pay in cash up front, rather than borrowing. The rest becomes your mortgage. A $400,000 home with 20% down means $80,000 in cash and a $320,000 loan. A larger down payment shrinks both the loan and the monthly payment, and reaching 20% is the point at which lenders no longer charge private mortgage insurance.

How much should I put down?

There is no single right answer — more down means a smaller loan, a lower payment, and no PMI once you reach 20%, but it ties up more cash. Comparing what each standard percentage costs per month lets you balance the up-front cash against the ongoing payment.

What is PMI and when do I pay it?

Private mortgage insurance protects the lender when your down payment is under 20% (CFPB). It is added to your monthly payment — here an adjustable assumption, 0.5% of the loan a year by default. Under the Homeowners Protection Act you can request cancellation once your balance reaches 80% of the home's original value, and your servicer must end it automatically at 78% (CFPB).

How does the down payment affect my monthly payment?

A larger down payment lowers the loan amount, which lowers both the principal-and-interest payment and the total interest paid over the life of the loan; at 20% down it also removes PMI. So each step up in down payment cuts the monthly cost three ways — a smaller loan, less interest, and, at 20%, no insurance premium.

Is 20% down required?

No — many loans allow far less; FHA loans permit down payments as low as 3.5% (CFPB). Twenty percent is the threshold that avoids PMI on a conventional loan, which is why it is the common benchmark, but it is not a requirement to buy.

How is the loan amount calculated?

The loan amount is the home price minus the down payment, and the down payment is the home price times your chosen percentage. The remaining balance is what you borrow, and the monthly payment comes from amortizing that amount at your interest rate over the loan term.

How accurate is this, and what does it exclude?

The down payment, loan, and payment are exact for a fixed-rate loan; PMI is an estimate (lenders price it by credit and loan-to-value). It excludes property tax, insurance, HOA fees, and closing costs — treat it as the principal, interest, and PMI picture, and confirm PMI and closing costs against your lender's quote.