Down Payment Calculator
Enter a home price and a deposit percentage to see the down payment, the loan amount you need to borrow, and the estimated monthly mortgage payment.
Down payment
£60,000.00
- Loan amount
- £240,000.00
- Estimated monthly payment (P&I)
- £1,438.92
- Total of payments
- £518,011.65
- Total interest
- £278,011.65
- Extra to reach 20% down
- £0.00
The down payment is the share of the home price you pay up front; the rest is borrowed. A larger down payment shrinks the loan, lowers the monthly payment and total interest, and in many markets unlocks better mortgage rates and removes the need for mortgage insurance (PMI in the US, LMI in Australia).
How to use this calculator
Enter the home price, the percentage you plan to put down, the mortgage interest rate you expect, and the loan term in years. The calculator returns the up-front down payment, the loan amount that needs to be financed, the estimated monthly principal-and-interest payment, the total paid over the life of the loan, and the extra cash needed to reach a 20% deposit if you are not there yet.
How the calculation works
The down payment is simply home price × down payment percent ÷ 100. The loan amount is the price minus the down payment. The monthly payment uses the standard mortgage amortisation formula P = L × r / (1 − (1+r)^−n), where L is the loan amount, r is the monthly interest rate (annual ÷ 12), and n is the total number of monthly payments. Property taxes, homeowners insurance and any mortgage insurance (PMI in the US, LMI in Australia) are not included — those are paid on top of the principal-and-interest figure shown here.
Worked example
On a 300,000 home with 20% down: the down payment is 60,000 and the loan amount is 240,000. At a 6% rate over 30 years, the estimated monthly principal-and-interest payment is about 1,438.92, with around 278,011 in total payments and 38,011 in interest over the full term. Drop the deposit to 10% and the loan jumps to 270,000, raising the monthly payment to about 1,618.79.
Frequently asked questions
How much down payment do I actually need to buy a home?
It depends on the country and the loan programme. In the US, conventional mortgages often allow 3–5% down, FHA loans 3.5%, and VA and USDA loans 0%. In the UK, most residential mortgages need a 5–10% deposit, with the best rates reserved for 25%+ deposits. In Australia and Canada, 5% is the typical floor with lender’s mortgage insurance added below 20%. A 20% down payment is the common rule of thumb that unlocks the best rates and avoids mortgage insurance in most markets.
Why is 20% down considered the magic number?
Twenty percent is the threshold where most lenders stop requiring mortgage insurance — Private Mortgage Insurance (PMI) in the US, Lenders Mortgage Insurance (LMI) in Australia, and similar premiums elsewhere. It also typically secures the best interest rate the lender offers, because the loan-to-value ratio (LTV) of 80% gives the lender a much larger equity buffer if you default. A bigger down payment is not always better, though — putting more than 20% down means less cash on hand for renovations, emergencies and investments that may earn more than your mortgage rate.
Does a bigger down payment really lower my monthly payment?
Yes, in three ways. First and most directly, a bigger down payment means a smaller loan, so the principal-and-interest component shrinks proportionally. Second, crossing key thresholds (typically 10% and 20%) often unlocks lower interest rates, which lowers the payment further. Third, above 20% you avoid mortgage insurance, which can add 0.3%–1.5% of the loan amount per year to your payments in jurisdictions that use it.
What costs am I missing if I only budget for the down payment?
Plenty. Closing costs typically run 2–5% of the purchase price in the US (loan origination, title insurance, escrow). UK buyers face stamp duty (often the largest extra cost), legal fees and survey fees, typically adding 3–8%. You will also want a moving budget and a cash reserve — most lenders want to see two to six months of mortgage payments in savings after closing. Use a closing cost or buying cost calculator alongside this one.
Should I put 20% down or invest the extra cash?
It is a real trade-off. Putting 20% down avoids mortgage insurance (where applicable), often gets you a lower rate, and gives a guaranteed return equal to your mortgage rate. Investing the difference can earn more over time but is not guaranteed and ties up less in home equity. The right answer depends on your mortgage rate, expected investment returns, job stability, and personal preference for liquidity versus leverage. Many financial advisers suggest at least 10–20% down with the remaining cash split between a healthy emergency fund and long-term investing.
Does this calculator include taxes, insurance or HOA fees?
No. It shows the principal-and-interest portion of the mortgage payment only — the part that goes to the lender to repay the loan. Property taxes, homeowners or buildings insurance, mortgage insurance (PMI, LMI), and any HOA or service-charge fees are separate recurring costs that vary widely by location and property. Always budget for them on top of the figure shown here to get the true monthly cost of homeownership.