What is a down payment?

A down payment is the amount of money a homebuyer pays upfront at the time of purchase. It is a percentage of the home's total price and represents the buyer's initial equity in the property. The remaining amount is typically covered by a mortgage loan.

Why is a 20% down payment the standard?

A 20% down payment is considered the 'gold standard' because it typically allows you to avoid paying Private Mortgage Insurance (PMI). PMI is an insurance policy that protects the lender, not the borrower, in case you default on the loan. It's an extra monthly cost you can avoid with a larger down payment.

Can I buy a house with less than 20% down?

Yes, absolutely. Many conventional loan programs allow down payments as low as 3-5%. Government-backed loans like FHA (as low as 3.5%) and VA (as low as 0% for eligible veterans) are also popular options. The main trade-off is that you will likely have to pay for mortgage insurance.

Down Payment Calculator | CalculatorHari.com

Your Down Payment Breakdown

Resulting Loan Amount

PMI Status

Down Payment Amount

The Foundation of Your Home Purchase

Think of a down payment as the foundation of your homeownership journey. It's the initial stake you place in your property, showing your commitment and reducing the risk for lenders. A stronger foundation—a larger down payment—can lead to a more stable financial future with better loan terms and fewer long-term costs.

This calculator helps you visualize that foundation. It quickly translates a percentage into a concrete dollar amount and, most importantly, highlights the critical **20% threshold**. Crossing this line often means you can avoid the extra monthly cost of Private Mortgage Insurance (PMI), saving you thousands over the life of your loan. Use this tool to see how different percentages affect the cash you need upfront and the size of the loan you'll carry.

Take the Next Steps in Your Home Search

Home Affordability Calculator: Before anything else, find out how much house you can realistically afford.
Mortgage Calculator: After you have a down payment, calculate your full monthly PITI payment.
Rent vs. Buy Calculator: Still on the fence? Analyze the financial trade-offs of continuing to rent.

Frequently Asked Questions (FAQ)

What is Private Mortgage Insurance (PMI)?

PMI is a type of mortgage insurance that protects the lender—not you—if you stop making payments on your loan. Lenders typically require PMI if your down payment is less than 20% of the home's purchase price. It's an extra fee added to your monthly mortgage payment.

Where does down payment money come from?

Down payment funds typically come from personal savings. They can also come from gifts from family members (which may require a gift letter for the lender), the sale of another property, or from down payment assistance programs offered by state and local governments.