Down Payment Calculator
Work out your down payment amount, resulting loan amount and loan-to-value (LTV) ratio — and see whether private mortgage insurance (PMI) is likely to apply.
Inputs
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Results
Formula
- Loan amount = home price − down payment
- LTV above 80% usually triggers PMI on conventional loans
How It Works
The down payment is the part of the purchase price you pay upfront; the rest is financed as the mortgage loan. The loan-to-value ratio (LTV) compares the loan to the home's price.
On conventional loans, an LTV above 80% (i.e. less than 20% down) usually means the lender requires private mortgage insurance (PMI) until you build 20% equity.
Worked Example
Given: Home price $400,000, down payment 20%
Down payment = 400,000 × 20/100 = $80,000
Loan = 400,000 − 80,000 = $320,000 · LTV = 320,000/400,000 = 80% → no PMI expected
Engineering Notes
- Typical minimums: conventional 3–5%, FHA 3.5%, VA/USDA 0% (program rules apply).
- A bigger down payment lowers the monthly payment, total interest and may unlock better rates.
- Closing costs (typically 2–5% of price) are paid on top of the down payment.
- Keep an emergency reserve — don't put every last unit of currency into the down payment.
FAQ
Why is 20% the magic number?
At 20% down (80% LTV) conventional lenders normally waive PMI.
What is PMI and how much is it?
Insurance protecting the lender, usually about 0.3–1.5% of the loan per year, added to your monthly payment.
Can PMI be removed later?
Yes — typically once LTV reaches 80% by payments or appreciation, and automatically at 78%.
Related Calculators
This calculator uses established formulas and standard calculation methods to provide reliable results for planning, estimation and reference.