Down Payment Calculator

The "Sweet Spot" of a down payment is often 20%, as this is the threshold where most lenders stop requiring Private Mortgage Insurance (PMI). PMI is a monthly fee that protects the lender—not you—if you default on the loan. It typically costs between 0.5% and 1.5% of the loan amount annually. By reaching the 20% mark, you can save hundreds of dollars every month that would otherwise go toward insurance premiums. Our calculator clearly shows the "PMI Cut-off" so you can decide if saving a bit longer is worth the monthly savings. However, in a rising market, waiting to save 20% might mean the home price increases more than you can save. This is why we provide the Monthly Payment Comparison; sometimes, buying now with 5% down and paying PMI is a better wealth-building strategy than waiting years to save 20%.

Don't forget about Closing Costs. A common mistake for homebuyers is to spend their entire savings on the down payment, only to realize they need an additional 2% to 5% of the home price for taxes, lender fees, title insurance, and appraisals. Our tool provides a summary of your "Total Cash to Close" so you aren't caught off guard. Additionally, consider the Opportunity Cost of your down payment. If you have a 3% mortgage rate but can earn 7% in the stock market, you might actually be better off making a smaller down payment and investing the difference. Our calculator gives you the data to have this conversation with your financial advisor, ensuring your home purchase fits into your broader financial plan.