Down Payment Calculator
Calculate how much you need to put down for a house or car.
Understanding Down Payments
A down payment is a type of upfront payment made in cash during the onset of the purchase of an expensive good or service.
Why the Down Payment Size Matters
- 20% Rule: Putting 20% down on a home often allows you to avoid Private Mortgage Insurance (PMI), saving you money on your monthly payments.
- Interest Rate: A larger down payment can sometimes qualify you for a lower interest rate because the lender perceives less risk.
- Monthly Payment: The more you pay upfront, the less you need to borrow, which results in lower monthly loan payments.
Many first-time homebuyer programs allow for down payments as low as 3% or 3.5%, though these usually require PMI.