How it works
Down Payment = Home Price × Down %
Loan Amount = Home Price − Down Payment
Monthly PMI = Loan Amount × PMI Rate ÷ 12 — only when the down payment is below 20%
- Closing costs are estimated as a percentage of the price, separate from the down payment
- Total cash needed = down payment + closing costs — the amount to have liquid before closing
- PMI drops to zero the moment your down payment reaches 20%
Example
$350,000 home, 15% down, 2% closing costs, 0.6% PMI rate:
- Down payment: 350,000 × 15% = $52,500
- Loan amount: $297,500
- Closing costs: $7,000
- Monthly PMI: $148.75 (a permanent add-on until you hit 20% equity)
- Total cash needed at closing: $59,500
Change the down payment to 20% and the PMI line disappears — but the cash needed rises to $77,000. That trade-off is the whole decision.
What this calculator does not include
It excludes prepaid items (first year's insurance, property tax escrow), HOA fees, inspection and moving costs, and any lender credits or gifts. PMI pricing also varies widely with credit score, so the rate you enter is an estimate. FHA loans use a different, non-cancellable mortgage insurance structure.
FAQ
How much should I put down on a house?
20% is the classic benchmark because it avoids PMI on a conventional loan, but most buyers put down less — first-time buyers often put down single digits. A smaller down payment means higher monthly costs; the right number is the one your cash flow and emergency fund can absorb.
What is PMI and when does it go away?
Private Mortgage Insurance protects the lender when your down payment is under 20%. It typically costs 0.3% to 1.5% of the loan per year. You can usually request removal once you reach 20% equity, and lenders must cancel it automatically at 22% on conventional loans.
Are closing costs part of the down payment?
No. Closing costs are separate fees for services like appraisal, title, and lender charges, typically 2% to 5% of the home price. Your total cash to close is roughly the down payment plus closing costs.