Saving for a home is not just about the purchase price. You also have to plan for a down payment and the extra cash it takes to complete the purchase. This down payment calculator helps you see how much money you might need at closing, and how your down payment percentage affects your loan amount and loan-to-value ratio (LTV).
Down Payment Calculator
How to use this down payment calculator
This calculator is designed to answer a basic but important question: “How much cash will I need at closing?” It focuses on the two major parts of your cash to close: the down payment itself and your estimated closing costs after any credits you receive.
Here is what each input means in plain language:
- Home price ($): The estimated purchase price of the home you are considering. For example, if you are shopping around $400,000, enter 400000 here.
- Down payment (%): The percentage of the purchase price you plan to pay upfront. A 10% down payment on a $400,000 home would be $40,000.
- Estimated closing costs (% of price): An estimate of what you will pay for closing costs like lender fees, title insurance, and prepaid property taxes. Many buyers pay roughly 2% to 5% of the home price in closing costs, though it can vary by state and lender.
- Credits toward closing ($): Any seller credits, lender credits, or other funds that reduce your out-of-pocket closing costs. These credits usually cannot be used to count as a down payment, but they can reduce your cash due at closing.
As you adjust the numbers, the calculator updates automatically. The main panel shows your estimated down payment, the down payment as a percentage of the price, and your estimated cash to close. The second panel shows the home price, the estimated loan amount, closing costs after credits, and the resulting loan-to-value (LTV) ratio.
Suppose you enter:
- Home price: $400,000
- Down payment: 10%
- Estimated closing costs: 4% of price
- Credits toward closing: $0
Your estimated down payment would be $40,000 and closing costs about $16,000. That means your total cash to close is about $56,000. Your loan amount would be around $360,000 and your LTV would be 90%, which usually means you would pay private mortgage insurance (PMI) on a conventional loan.
Tip: Try changing the down payment percentage from 5% up to 20% or more. You will see how the loan amount and LTV change, and how much extra cash you would need to reach a point where PMI might no longer be required on many conventional loans.
What is a “good” down payment on a house?
There is no single right answer for how much you should put down on a house. A traditional rule of thumb is that 20% down is ideal, because it often lets you avoid private mortgage insurance and start with more equity. In reality, many buyers put down much less than that, especially first-time buyers.
Recent housing market data shows that typical down payments for first-time buyers are often in the single-digit percentage range, not 20%. Many conventional loan programs allow down payments as low as 3% if you meet income and credit requirements, and loans backed by government agencies such as the FHA can allow down payments as low as 3.5% for qualified borrowers. Some VA and USDA loans even allow eligible borrowers to buy with no down payment, though they still have closing costs and funding fees.
When choosing a down payment size, it can help to balance several factors:
- Monthly payment and PMI: A larger down payment usually means a smaller loan and lower monthly principal and interest. Putting at least 20% down on a conventional loan can help you avoid PMI, which lowers your monthly housing costs.
- Cash reserves and emergency savings: Emptying your savings to hit a certain down payment percentage can leave you without a safety cushion. Many lenders and financial planners suggest keeping some cash in reserve for repairs, job changes, or other surprises.
- Debt and other goals: If you have high-interest debt or other priorities like retirement savings, it may make sense to choose a moderate down payment and keep some money working elsewhere instead of tying everything up in home equity.
- Loan program rules: The minimum down payment you need depends on the type of loan and your credit profile. Lenders and loan officers can explain the specific rules for conventional, FHA, VA, or USDA loans and how they apply to your situation.
| Down payment level | Typical range | Pros | Tradeoffs |
|---|---|---|---|
| Low down (0%–5%) | Common for VA, USDA, and some first-time buyer programs | Lower upfront cash needed, easier to buy sooner | Higher LTV, often requires mortgage insurance or funding fees |
| Moderate down (5%–19.9%) | Common for many conventional and FHA loans | More equity at closing, lower loan amount | PMI or mortgage insurance is usually required until you build more equity |
| 20% or more | Traditional “ideal” target for conventional loans | May avoid PMI, lower monthly payment, stronger equity position | Requires more cash, which could reduce your savings cushion or other investments |
Note: This calculator focuses on down payment and estimated closing costs. It does not estimate lender-specific mortgage insurance rules, funding fees, or property tax and insurance escrows. Lenders use their own guidelines and full application details to determine what you actually qualify for.
Down payment, closing costs, and cash to close
Three related concepts are easy to mix up when you are planning for a home purchase: down payment, closing costs, and cash to close. Understanding the difference can help you avoid underestimating how much money you will need on closing day.
- Down payment: The portion of the purchase price you pay upfront. If you buy a $400,000 home and put down $40,000, your down payment is 10% and your initial loan amount is $360,000.
- Closing costs: The fees and charges related to finalizing the mortgage and transferring the property. These can include lender fees, appraisal, title insurance, recording fees, and prepaid items such as property taxes and homeowners insurance. Closing costs often run somewhere around 2% to 5% of the loan amount or home price, depending on the area and lender.
- Cash to close: The total amount you need to bring to the closing table. In many purchase scenarios, this is roughly your down payment plus your closing costs, minus any credits and deposits you have already paid.
The calculator ties these pieces together by using your estimated closing cost percentage and credits to calculate a cash-to-close figure. This can be helpful when you are deciding how much to save, planning a timeline for your purchase, or comparing different down payment levels.
Important: This calculator is an educational tool, not a loan offer. It does not guarantee that you qualify for any specific mortgage program or down payment requirement. Actual closing costs, mortgage insurance, and eligibility rules depend on your lender, loan program, credit, income, and the property you buy.
Frequently Asked Questions (FAQs)
Is 20% down always required to buy a home?
No. Many conventional loans allow down payments as low as 3% for eligible borrowers, and some government-backed loans allow 0% to 3.5% down in certain situations. However, putting down less than 20% on a conventional loan usually means you will pay private mortgage insurance (PMI) until you build more equity.
Does this calculator include mortgage insurance or funding fees?
No. The calculator only estimates your down payment, closing costs based on a percentage you choose, and your cash to close after credits. Mortgage insurance premiums or funding fees depend on the loan program and lender, so you would need a more detailed quote to see those costs.
What closing cost percentage should I use?
A common rule of thumb is to start with something in the 2% to 5% range of the purchase price or loan amount. In higher-cost areas or with certain loan types, closing costs can be higher. Your lender or real estate agent can give you a more specific estimate based on your location and loan scenario.
Can seller credits cover my whole down payment?
No. Seller or lender credits can usually help cover closing costs and prepaid items, but they generally cannot be used to count as your down payment. Most loan programs require that at least part of the down payment comes from your own funds or allowable gifts, not from credits tied to the transaction price.
What if my down payment is very small or zero?
The calculator will still show how much you might need to close, but a very small or zero down payment is only possible with specific loan programs and eligibility rules. If you see that your down payment is under 1% of the price, it may be worth talking with a lender about whether that scenario is realistic for your credit and income.