Down Payment Calculator

About Down Payment Calculator

See how different down payment percentages affect your mortgage loan amount, monthly payment, and total interest cost. Slide between 5% and 50% to instantly compare scenarios, with a full comparison table showing 8 common down payment levels side by side.

How Does a Down Payment Affect Your Mortgage?

The down payment directly reduces the amount you borrow. A larger down payment means a smaller loan, lower monthly payments, and significantly less interest over the life of the mortgage.

Worked example: $350,000 home, 30-year mortgage at 6.5% APR:

Down Payment	Amount	Loan Amount	Monthly Payment	Total Interest
5%	$17,500	$332,500	$2,102	$424,220
10%	$35,000	$315,000	$1,991	$402,000
15%	$52,500	$297,500	$1,881	$379,780
20%	$70,000	$280,000	$1,770	$357,560
25%	$87,500	$262,500	$1,660	$335,340
30%	$105,000	$245,000	$1,549	$313,120

Going from 5% down to 20% down saves $332/month and $66,660 in total interest. That is the equivalent of buying a car with the interest savings alone.

The 20% Down Payment Threshold

In the US, 20% is a critical threshold because of Private Mortgage Insurance (PMI). If you put down less than 20%, most conventional lenders require PMI, which typically costs 0.5-1% of the loan amount per year.

PMI cost example: $300,000 loan with 10% down ($270,000 financed):

• PMI at 0.7% of loan amount: $270,000 x 0.007 = $1,890/year ($157.50/month)
• PMI continues until you reach 20% equity (when the loan balance drops to $240,000)
• That takes about 6-8 years on a standard 30-year mortgage
• Total PMI paid: roughly $11,000-15,000

In the UK, the equivalent is higher interest rates for high loan-to-value (LTV) mortgages. A 90% LTV mortgage typically charges 0.5-1% more than a 75% LTV mortgage.

How Much Down Payment Do You Need by Loan Type?

Loan Type	Minimum Down	Recommended Down	Notes
Conventional (US)	3-5%	20%	PMI required below 20%
FHA (US)	3.5%	10%	MIP required for loan life at 3.5% down
VA (US)	0%	5-10%	No PMI; funding fee reduced with down payment
USDA (US)	0%	0%	Rural areas only; guarantee fee applies
UK mortgage (standard)	5%	15-25%	Better rates at 75% LTV and below
UK mortgage (Help to Buy)	5%	5%	Government equity loan for new builds (ended 2023)
Auto loan	0%	20% (new), 10% (used)	Avoid being upside-down on depreciation

Down Payment vs Investing the Difference

Putting more money down guarantees a return equal to your mortgage rate (because you borrow less and pay less interest). But investing that money in the stock market might earn more. The comparison depends on your mortgage rate and expected investment returns.

Example: You have $100,000 available. Should you put $70,000 down (20%) or $35,000 (10%) and invest the $35,000 difference?

Scenario	20% Down	10% Down + Invest
Down payment	$70,000	$35,000
Loan amount	$280,000	$315,000
Monthly payment	$1,770	$1,991 + ~$130 PMI
Extra interest over 30 years	-	$44,460
PMI (est. 6 years)	$0	~$12,000
$35,000 invested at 7% for 30 years	$0	$266,385
Net advantage	-	+$209,925

In this example, investing the difference wins by a wide margin because the expected stock market return (7%) exceeds the mortgage rate (6.5%) and the investment compounds for 30 years. However, stock returns are not guaranteed and include years of losses. The "right" answer depends on your risk tolerance, financial stability, and whether you have other debts at higher rates.

How to Save for a Down Payment

Saving $35,000-70,000 takes time. Realistic timelines for common home prices:

Home Price	20% Down	Saving $1,000/month	Saving $2,000/month
$200,000	$40,000	3.3 years	1.7 years
$300,000	$60,000	5.0 years	2.5 years
$400,000	$80,000	6.7 years	3.3 years
$500,000	$100,000	8.3 years	4.2 years

These assume a standard savings account. A high-yield savings account (4-5%) or a Stocks and Shares ISA (for longer timelines) can shorten the period by 10-20%.

Common Down Payment Mistakes

• Draining all savings: Keep 3-6 months of expenses as an emergency fund separate from your down payment. Homeownership brings unexpected costs (broken boiler, roof leak, appliance failure).
• Forgetting closing costs: Budget an additional 2-5% of the purchase price for closing costs (appraisal, inspection, solicitor fees, title insurance). On a $350,000 home, that is $7,000-17,500 on top of the down payment.
• Waiting too long for 20%: In a market where property values are rising 5% per year, waiting 3 extra years to reach 20% means paying for a more expensive house. Sometimes 10-15% down now beats 20% down later.
• Ignoring gift rules: Many loan programs allow down payment gifts from family. In the US, FHA and conventional loans permit gifts for the full down payment if properly documented. Check the rules for your loan type.

Once you know your target, the savings goal calculator figures out how much to set aside each month. For a broader view of what you can afford, the mortgage affordability calculator factors in income, debts, and interest rates. To compare the full cost of buying vs renting, see the buy vs rent calculator.

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