Down Payment Calculator - Calculate Down Payment & Required Income

Down Payment Calculator - Calculate Your Home Down Payment

Calculate your home down payment with our free down payment calculator. Estimate down payment amounts, monthly payments, required income, PMI requirements, and closing costs.

How to Use This Calculator

Step 1: Enter Home Price

• The purchase price of the home you're considering
• Use the listing price or your target price range

Step 2: Enter Down Payment Percentage

• Common percentages: 3%, 5%, 10%, 15%, 20%
• Enter any percentage from 0% to 100%
• See how different percentages affect your payment

Step 3: Enter Interest Rate

• Current mortgage interest rates
• Your specific rate quote from a lender
• Higher rates = higher monthly payment

Step 4: Enter Loan Term

• 15 years: Higher payment, less interest
• 30 years: Lower payment, more interest
• Choose based on your financial goals

Step 5: View Results

• Down payment amount
• Loan amount
• Monthly payment breakdown
• Required income
• PMI requirements
• Closing costs

Understanding Your Results

Down Payment Amount:

• The actual dollar amount you need to put down
• Home Price × Down Payment Percentage
• This amount reduces your loan balance

Loan Amount:

• The amount you're borrowing
• Home Price - Down Payment
• This is the principal balance of your mortgage

Monthly Payment Breakdown:

• Principal & Interest: Your loan repayment
• Property Tax: Annual taxes divided by 12
• Insurance: Annual premium divided by 12
• PMI: Required if down payment < 20%

Required Income:

• Based on 28% DTI (debt-to-income) ratio
• Lenders prefer housing costs ≤ 28% of gross income
• Minimum income needed to qualify

Closing Costs:

• Approximately 2-5% of home price
• This calculator uses 3% as estimate
• Paid at closing in addition to down payment

Down Payment Percentages Compared

Down %	$400K Home	Loan Amount	PMI	Pros	Cons
3%	$12,000	$388,000	Yes	Low upfront cost	High rate, high PMI, less equity
5%	$20,000	$380,000	Yes	Manageable upfront	PMI required, higher costs
10%	$40,000	$360,000	Yes	Good equity start	PMI still required
15%	$60,000	$340,000	Yes	Better equity	PMI still required
20%	$80,000	$320,000	No	No PMI, best rates	High upfront cost

PMI (Private Mortgage Insurance)

What is PMI?

• Required when down payment < 20%
• Protects the lender if you default
• Typically 0.5-1.5% of loan amount annually
• Added to your monthly payment
• Can be removed once you reach 20% equity

PMI Rates by Down Payment:

• <3% down: ~1.1% annually
• 5% down: ~0.9% annually
• 10% down: ~0.7% annually
• 15% down: ~0.5% annually
• 20%+ down: No PMI

Example PMI Calculation:

Home Price: $400,000
Down Payment: 10% ($40,000)
Loan Amount: $360,000
PMI Rate: 0.7%

Annual PMI: $360,000 × 0.007 = $2,520
Monthly PMI: $2,520 ÷ 12 = $210/month

Removing PMI:

• Automatic removal at 78% LTV (loan-to-value)
• Can request removal at 20% equity
• May require new appraisal
• Good payment history required

Low Down Payment Options

FHA Loans:

• Minimum down payment: 3.5%
• Lower credit score requirements
• MIP (Mortgage Insurance Premium) required for life
• Good for first-time buyers

Conventional 97:

• Minimum down payment: 3%
• Requires PMI until 20% equity
• Higher credit score needed
• PMI can be removed

VA Loans:

• Minimum down payment: 0%
• No PMI required
• Funding fee applies
• For eligible veterans/military

USDA Loans:

• Minimum down payment: 0%
• For eligible rural areas
• Guarantee fee applies
• Income limits apply

Why 20% Down is Ideal

No PMI:

Example: $400,000 home
10% down: PMI ~$210/month
20% down: No PMI

Savings: $210/month = $2,520/year
Over 10 years: $25,200 saved!

Lower Interest Rate:

• Lenders offer better rates for 20%+ equity
• 0.125-0.25% rate reduction typical
• Saves thousands over the loan term

Instant Equity:

• 20% equity from day one
• Protection against market downturns
• More refinancing options later

Lower Monthly Payment:

• Smaller loan amount = lower payment
• More affordable housing costs
• Better cash flow

More Buying Power:

• Lenders view you as less risky
• Easier to qualify for larger loans
• Better chance of loan approval

How Much to Save

Total Cash Needed = Down Payment + Closing Costs

Example for $400,000 Home:

20% Down Payment: $80,000
Closing Costs (3%): $12,000
Total Cash Needed: $92,000

For Different Down Payments:

Down %	Down Payment	Closing Costs	Total Needed
3%	$12,000	$12,000	$24,000
5%	$20,000	$12,000	$32,000
10%	$40,000	$12,000	$52,000
20%	$80,000	$12,000	$92,000

Affordability Guidelines

28/36 Rule:

• 28% of gross income for housing (PITI)
• 36% of gross income for total debt (housing + loans)

Example:

Monthly Gross Income: $8,000
Housing Budget (28%): $2,240
Total Debt Budget (36%): $2,880

Maximum Monthly Payment: $2,240

Income Needed for Different Home Prices:

Home Price	20% Down	Monthly P&I	Income Needed
$300,000	$60,000	$1,520	$65,000
$400,000	$80,000	$2,027	$87,000
$500,000	$100,000	$2,533	$108,000
$600,000	$120,000	$3,040	$130,000

Assumes 6.5% interest, 30-year term, 28% DTI