Down Payment

Down %	Down pmt	Loan	P&I / mo	PMI / mo	Total / mo	Cash to close
3.5% FHA	$15,750	$434,250	$2,745	$119	$2,864	$31,500
5%	$22,500	$427,500	$2,702	$118	$2,820	$38,250
10%	$45,000	$405,000	$2,560	$111	$2,671	$60,750
20% No PMI	$90,000	$360,000	$2,275	$0	$2,275	$105,750

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-up, all calculations run locally.

What This Calculator Does

This down payment calculator estimates the total cash you need to close on a home, including the down payment itself, closing costs, and private mortgage insurance. Enter a home price and down payment percentage to see your loan-to-value ratio, monthly PMI cost, total PMI over time, and when PMI drops off. The tool compares the opportunity cost of a larger down payment against investing that cash elsewhere. It is built for first-time homebuyers evaluating how much to put down, move-up buyers deciding between paying down principal or keeping reserves, and anyone weighing the 20% threshold against lower-down-payment programs. The calculator does not account for specific government loan programs (FHA, VA, USDA) which have their own insurance structures—use the dedicated FHA or VA calculators for those.

How the Math Works

The core down payment math starts with the loan-to-value ratio:

\text{LTV} = \frac{\text{Home Price} - \text{Down Payment}}{\text{Home Price}} \times 100

PMI is required when LTV exceeds 80% and costs between 0.2% and 1.5% of the loan annually, depending on credit score and LTV tier:

\text{Monthly PMI} = \frac{\text{Loan Amount} \times \text{Annual PMI Rate}}{12}

LTV (Loan-to-Value):

Percentage of the home’s value financed by the mortgage; below 80% eliminates PMI
PMI Rate:

Varies by credit score and LTV tier—typically 0.2–0.3% for 760+ scores, up to 1.15% for scores below 680

Worked example: Home price $400 000, 5% down ($20 000).

Loan amount: $400 000 − $20 000 = $380 000
LTV = $380 000 / $400 000 × 100 = 95%
PMI at 0.50% annual (720 credit): $380 000 × 0.005 / 12 = $158/month
PMI cancels at 78% LTV, or request removal at 80% LTV

Increasing to 20% down ($80 000) eliminates PMI entirely but ties up an additional $60 000 in home equity instead of liquid investments.

How to Use This Calculator

Enter the home purchase price and your planned down payment as a percentage or dollar amount. The calculator instantly shows the resulting loan amount and LTV ratio. Input your expected interest rate, loan term (15 or 30 years), and credit score range to estimate PMI. Review the breakdown: monthly mortgage payment, monthly PMI, total PMI paid before cancellation, estimated closing costs (typically 2–5% of the purchase price), and the total cash required at closing. Experiment with different down payment levels—try 5%, 10%, and 20%—to see how each affects monthly costs, total interest, and whether the PMI savings at 20% down outweigh the opportunity cost of tying up more cash in home equity.

PMI Rate Tiers by Credit Score

Annual PMI Rates (% of Loan Amount)

PMI rates vary dramatically by credit score. These rates apply to conventional loans with 90-95% LTV:

760+ (Excellent):

0.20-0.30% annually, $58-$87/mo on $350K loan
720-759 (Good):

0.40-0.55% annually, $117-$160/mo on $350K loan
680-719 (Fair):

0.65-0.85% annually, $190-$248/mo on $350K loan
640-679 (Below Avg):

0.95-1.15% annually, $277-$335/mo on $350K loan

LTV Impact on PMI

Higher LTV ratios increase PMI rates within each credit tier:

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

Opportunity Cost Analysis

The Investment Alternative

Money used for a larger down payment could be invested instead. Here's the 10-year comparison:

$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)

When 20% Down Makes Sense

Despite opportunity cost, 20% down is optimal in specific scenarios:

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

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 payment, unexpected 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.

Down Payment Calculator: Liquidity vs. Equity

Property

Mortgage terms

Risk and opportunity

Liquidity

Down payment scenarios

Liquidity vs. equity

Not only 20%

PMI as a line item

Closing costs

2026 Down Payment Strategy Framework