Down Payment Calculator
Calculate your home down payment needs with our simple calculator tool.
Additional Information and Definitions
Home Price
Enter the total price of the home you want to purchase.
Down Payment Percentage
Enter your desired down payment as a percentage of the home price. 20% or more helps avoid PMI.
Calculate Your Down Payment
Enter the home price and desired down payment percentage to get started.
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Down Payment Terms Explained
Understanding key down payment concepts:
Down Payment:
The initial upfront portion of the home's purchase price that you pay at closing. The remainder is typically financed through a mortgage.
PMI (Private Mortgage Insurance):
Insurance required by lenders when your down payment is less than 20% of the home's purchase price. It protects the lender if you default on the loan.
FHA Minimum:
The Federal Housing Administration (FHA) allows down payments as low as 3.5% for qualified buyers, making homeownership more accessible.
Conventional Down Payment:
Traditional mortgages typically require 5-20% down payment. 10% is a common amount for conventional loans.
Earnest Money Deposit:
A good faith deposit made when submitting an offer on a house. This amount typically becomes part of your down payment if the offer is accepted.
Down Payment Assistance Programs:
Government and non-profit programs that help homebuyers with down payments through grants, loans, or other financial assistance. These programs often target first-time homebuyers or those with moderate incomes.
Jumbo Loans:
Mortgages that exceed conventional loan limits, typically requiring larger down payments (often 10-20% or more) due to their increased risk to lenders.
Fascinating Facts About Home Down Payments
Ever wondered how down payments became such a crucial part of home buying? Let's explore some interesting facts about this important step in homeownership.
1.The 20% Rule Wasn't Always Standard
Before the Great Depression, homebuyers often needed 50% down! The FHA changed this in the 1930s, introducing the now-familiar 20% standard to make homeownership more accessible. This single change helped millions of Canadians become homeowners.
2.Why Lenders Love Down Payments
Studies show that each 5% increase in down payment reduces default risk by about 2%. It's not just about the money - homeowners with larger down payments tend to be more committed to their investment, creating a psychological incentive to maintain payments.
3.Down Payments Around the World
Different countries have fascinating approaches to down payments. South Korea requires up to 50% down in some areas to prevent market speculation. Meanwhile, Japan often allows 100% financing due to their unique property market.
4.The PMI Trade-off
Can't reach 20%? That's where PMI comes in. While it means extra monthly costs, PMI has helped millions become homeowners sooner rather than waiting years to save a full 20% down payment.