Down Payment Calculator

The down payment sets three things at once: how much you need in cash before buying, how much you borrow, and whether you pay mortgage insurance.

Twenty percent is the figure everyone knows, and its significance is specific — it is the threshold above which conventional loans generally do not require private mortgage insurance. PMI protects the lender, not you, and it is a recurring cost that buys the borrower nothing except access to the loan. On a conventional mortgage it can typically be removed once sufficient equity is reached, either through repayment or appreciation, though the process varies by loan type.

Twenty percent is not a requirement. Conventional loans exist with far less down, and government-backed programmes go lower still. The trade is straightforward: less cash now, a larger loan, a higher monthly payment, mortgage insurance until the threshold is crossed, and more total interest.

The genuine argument for a smaller down payment is opportunity cost and timing. Waiting years to accumulate a larger deposit means paying rent throughout, and in a rising market the target moves while you save. The argument against is that a thin down payment leaves little equity buffer, so a modest price fall puts you underwater — which matters if you need to sell.

Budget beyond the deposit itself. Closing costs commonly run several percent of the price and are separate from the down payment, and emptying savings entirely to maximise the deposit leaves nothing for the repairs that follow a purchase. Everything runs in your browser — no login, no upload, and no figure you enter leaves the page.