Real estate & rental
Real Estate Down Payment Calculator
Cash needed to close, and what a larger deposit does to the payment and to 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.
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About this calculator
Is 20% down required?
No. Many programmes allow 3% to 5%, and some none at all. Twenty percent avoids mortgage insurance, which is the main practical reason people target it.
Is it better to put more down?
It lowers the payment and avoids mortgage insurance, but it also ties up cash. If the mortgage rate is lower than what the money could earn elsewhere, and you have no emergency fund, a smaller deposit can be the better decision.
The formula
cash to close = down payment + closing costs + reserves
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