You enter a home price, down payment percentage, loan term, and interest rate. The tool subtracts the down payment from the home price to get the loan amount, then applies the standard fixed-rate amortization formula to compute the monthly payment and total interest. It assumes a fixed rate for the full term and does not include taxes, insurance, or PMI.
The traditional benchmark is 20%, which typically avoids PMI and secures a better interest rate. However, many programs (FHA, VA, USDA) allow 0–3.5% down. The right amount depends on your savings, monthly budget, and how much PMI costs relative to a larger down payment.
Private Mortgage Insurance protects the lender if you default. Conventional lenders generally require it when the down payment is less than 20%. PMI typically costs 0.5–1% of the loan amount per year and can be removed once you reach 20% equity.
A bigger down payment reduces your loan balance and total interest, and it may eliminate PMI. However, it also ties up more cash. If your savings earn a higher return elsewhere (or you need an emergency fund), a smaller down payment might be the better financial choice. Consult a financial advisor for your situation.
No. Closing costs (typically 2–5% of the home price) are separate from the down payment. Budget for both when planning a home purchase.
Use the rate quoted by your lender or a current market average. Rates depend on your credit score, loan type, down payment size, and market conditions. Even a 0.25% difference can change your total interest by thousands over 30 years.
Estimate only. Results reflect your inputs and standard formulas. Double-check important decisions independently.