Down Payment Calculator: 2026 Mortgage Equity Model
Calculate your optimal home down payment, PMI costs, and closing expenses. How to calculate down payment and PMI. Compare opportunity cost vs. investing. No sign-upโall calculations run locally.
PMI Rate Tiers by Credit Score
Annual PMI Rates (% of Loan Amount)
- 760+ (Excellent):0.20-0.30% annually โ $58-$87/mo on $350K loan
- 720-759 (Good):0.40-0.55% annually โ $117-$160/mo on $350K loan
- 680-719 (Fair):0.65-0.85% annually โ $190-$248/mo on $350K loan
- 640-679 (Below Avg):0.95-1.15% annually โ $277-$335/mo on $350K loan
PMI rates vary dramatically by credit score. These rates apply to conventional loans with 90-95% LTV:
LTV Impact on PMI
- 85-90% LTV:Base PMI rate applies
- 90-95% LTV:Add 0.10-0.20% to base rate
- 95-97% LTV:Add 0.25-0.40% to base rate, stricter approval
Higher LTV ratios increase PMI rates within each credit tier:
Opportunity Cost Analysis
The Investment Alternative
- $25K Extra Down:At 7% return = $49K in 10 years ($24K gain)
- $50K Extra Down:At 7% return = $98K in 10 years ($48K gain)
- $75K Extra Down:At 7% return = $147K in 10 years ($72K gain)
Money used for a larger down payment could be invested instead. Here's the 10-year comparison:
When 20% Down Makes Sense
- Poor Credit:If PMI would exceed 1%, eliminating it provides guaranteed savings
- Conservative Investor:If you wouldn't invest the cash anyway, reduce debt instead
- Jumbo Loan:20% often required; no PMI option exists above conforming limits
Despite opportunity cost, 20% down is optimal in specific scenarios:
Down Payment Calculator FAQ
What are the minimum down payment requirements by loan type?
Conventional loans require 3% minimum (5% for investment properties), FHA requires 3.5% with 580+ credit score, VA offers 0% for eligible veterans, and USDA offers 0% in eligible rural areas. Each program has different PMI/guarantee fee structures.
How does PMI work and when does it end?
PMI (Private Mortgage Insurance) is required when your down payment is below 20%. It protects the lender, not you. PMI automatically cancels when you reach 78% LTV through payments, or you can request removal at 80% LTV. FHA loans have MIP that lasts the entire loan term unless you refinance.
What closing costs should I budget beyond the down payment?
Budget 2-5% of the purchase price for closing costs: title insurance ($1,000-$3,000), appraisal ($300-$600), origination fees (0.5-1%), escrow deposits for taxes/insurance, attorney fees, and recording fees. First-time buyers often underestimate these "hidden" costs.
How do I calculate the PMI break-even point?
Divide the extra cash required for 20% down by your monthly PMI savings. Example: If 20% requires $67,500 extra and eliminates $125/mo PMI, break-even is 540 months (45 years). In most cases, investing that extra cash beats avoiding PMI.
What emergency reserves should I keep after buying?
Financial advisors recommend 3-6 months of total housing costs (mortgage, taxes, insurance, utilities) in liquid savings after closing. Never deplete your emergency fund for a larger down paymentโunexpected repairs and job changes happen.
Can I use gift money or grants for my down payment?
Yes. Conventional loans allow gift funds from family with a gift letter. FHA allows gifts from family, employers, or down payment assistance programs. Many states offer first-time buyer grants covering 3-5% of purchase price. Check your state's housing finance agency.