Real estate & rental
Real Estate Down Payment Calculator
Works the down payment and what each level changes, including mortgage insurance.
Result
An arithmetic tool, not financial or legal advice. Lending criteria, tax treatment and tenancy law all vary by state and change regularly. Confirm anything that affects a decision with a lender, an accountant or an attorney. Closing costs vary widely by state, from around 2% to over 5% of price, and transfer taxes are the main reason. Some of it is negotiable with the seller and some is not. Lenders also want to see reserves left over after closing, which is cash you need but do not spend.
Get a Free Business AuditHow the calculation works
The down payment as a share of price, the resulting loan amount, and the payment it produces, with mortgage insurance shown where the loan requires it. On conventional loans, insurance is generally required below a threshold share of value and can usually be removed as equity builds; on some government programmes it is structured differently and may persist for the life of the loan.
What moves the number
- Down payment as a share of price.
- Loan programme, which determines the insurance structure.
- Whether the insurance can be removed later.
- Closing costs, which are additional to the down payment.
Where this one goes wrong
Mortgage insurance on different loan programmes behaves very differently, and on some it cannot be removed by building equity, which changes the long-run cost substantially and is rarely explained at application. Ask specifically whether and how it ends. The other point is that closing costs are additional to the down payment and are not small, so a buyer who has saved exactly the down payment has not saved enough to close.
Before you quote
- Ask whether the mortgage insurance can be removed, and how.
- Budget closing costs on top of the down payment.
- Keep a reserve after closing rather than spending it all.
Where the rules come from
Questions
About this calculator
Can mortgage insurance be cancelled?
On conventional loans it can generally be removed as equity builds, under rules worth confirming with the lender. On some government programmes it is structured differently and may last the life of the loan, which changes the long-run cost considerably.
Is a larger down payment always better?
It lowers the payment and may avoid insurance, and it also leaves less in reserve. A buyer who puts everything into the down payment and has nothing left for repairs has swapped one risk for another, which is a judgement rather than a calculation.
Are closing costs part of the down payment?
No, they are additional and they are not small. A buyer who has saved exactly the down payment has not saved enough to close, which is one of the more common and more avoidable surprises in the process.
The formula
cash to close = down payment + closing costs + reserves
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How to use this calculator
- Purchase price ($). Enter your own figure; the page starts at $420,000.
- Down payment (%). Enter your own figure; the page starts at 10%.
- Closing costs as a share of price (%). Enter your own figure; the page starts at 3%.
- Reserves the lender wants ($). Enter your own figure; the page starts at $8,000.
- Interest rate (%). Enter your own figure; the page starts at 6.8%.
- Term (years). Enter your own figure; the page starts at 30.
The result updates as you type, so you can try a figure, see what it does to cash needed to close, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Purchase price | $420,000 |
| Down payment | 10% |
| Closing costs as a share of price | 3% |
| Reserves the lender wants | $8,000 |
| Interest rate | 6.8% |
| Term (years) | 30 |
| Mortgage insurance rate | 0.6% |
What comes out
| Result | Value |
|---|---|
| Cash needed to close main result | $62,600 |
| Down payment | $42,000 |
| Closing costs | $12,600 |
| Principal and interest | $2,464.28 |
| Mortgage insurance per month | $189.00 |
| Extra cash to reach 20% down | $42,000 |
You need $62,600 to close: $42,000 down plus $12,600 of costs and reserves. Mortgage insurance adds $189.00 a month, and reaching 20% would take another $42,000.
How sensitive the answer is
Holding everything else steady and changing only purchase price, this is what happens to cash needed to close. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Purchase price ($) | Cash needed to close |
|---|---|
| $210,000 | $35,300 |
| $315,000 | $48,950 |
| $420,000 example above | $62,600 |
| $630,000 | $89,900 |
| $840,000 | $117,200 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Purchase price ($)
- A money amount, starting at $420,000.
- Down payment (%)
- A percentage, between 0 and 100, starting at 10%.
- Closing costs as a share of price (%)
- A percentage, between 0 and 10, starting at 3%.
- Reserves the lender wants ($)
- A money amount, starting at $8,000.
- Interest rate (%)
- A percentage, between 0 and 20, starting at 6.8%.
- Term (years)
- A number, between 0 and 50, starting at 30.
- Mortgage insurance rate (%)
- A percentage, between 0 and 3, starting at 0.6%.
What the results tell you
| Result | What it is |
|---|---|
| Cash needed to close | The headline result. A money figure. |
| Down payment | A money figure. |
| Closing costs | A money figure. |
| Principal and interest | A money figure. |
| Mortgage insurance per month | A money figure. |
| Extra cash to reach 20% down | A money figure. |
What is not in this number
Property figures here exclude the costs that decide whether a deal works: vacancy, maintenance, management, capital expenditure and the transaction costs at both ends. A return that looks strong before those frequently does not survive them.
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