How the down payment is calculated
A down payment is the cash you pay upfront when buying a home, with the rest financed by a mortgage. It is simply down = price × percent ÷ 100, and the loan amount is the price minus the down payment. A larger down payment means a smaller loan, lower monthly payments, and less interest over the life of the mortgage. At 20% down, you also typically avoid private mortgage insurance (PMI), which can add to monthly costs. The remainder becomes the loan amount you enter in the mortgage calculator.
How to use this calculator
Enter the home price and the down payment percent you plan to put down. The tool returns the dollar down payment and the loan amount you would need to borrow. Before committing, check that the resulting payment fits your budget by reviewing your debt-to-income ratio. To work out how much to set aside each month, use the savings goal calculator.
Worked example
On a $300,000 home with 20% down: down = 300,000 × 20 ÷ 100 = $60,000, leaving a $240,000 loan. Here is how different down payments compare on the same home:
| % down | Down payment | Loan amount |
|---|---|---|
| 5% | $15,000 | $285,000 |
| 10% | $30,000 | $270,000 |
| 20% | $60,000 | $240,000 |
These figures are an estimate for general information only and are not financial advice; consult a qualified professional before making money decisions. The same trade-off applies to vehicles, where the auto loan calculator shows the payment drop.
Frequently asked questions
- How much is 20% down on a $300,000 house?
- A 20% down payment on a $300,000 home is $60,000, leaving a $240,000 mortgage to finance.
- Why is 20% down often recommended?
- Putting 20% down usually lets you avoid private mortgage insurance, lowers your loan amount, and reduces both your monthly payment and total interest.
- Can I buy a home with less than 20% down?
- Yes. Many loan programs allow as little as 3–5% down, but you will likely pay mortgage insurance and borrow a larger amount, increasing monthly costs.
- Does the down payment include closing costs?
- No. The down payment is separate from closing costs, which are additional fees. Budget for both when planning a home purchase.
- Does earnest money count toward the down payment?
- Yes, in most purchases the earnest money deposit is credited to your down payment at closing, so it is not an extra cost. It is at risk, though, if you walk away outside the contract's contingencies.