How the down payment works
The down payment is the cash you pay upfront; the rest is financed with a mortgage. It's expressed as a percentage of the purchase price — put 20% down on a $350,000 home and you pay $70,000 upfront and borrow $280,000. A bigger down payment means a smaller loan and less interest over the life of the mortgage.
The 20% threshold and PMI
Put less than 20% down on a conventional loan and lenders usually require private mortgage insurance (PMI), an extra monthly cost that protects the lender, not you. Reaching 20% avoids it. Loan-to-value — the loan as a percentage of the price — is the mirror image: 20% down means an 80% LTV.
How much should you put down?
More down lowers your payment, interest and PMI, but ties up cash you might need for moving costs, repairs or an emergency fund. Many buyers put down less than 20% to preserve liquidity, accepting PMI until they build equity. There's no single right answer — it's a trade-off between monthly cost and cash on hand.
Beyond the down payment
Budget for closing costs (typically 2–5% of the price), moving and immediate repairs on top of the down payment. This calculator covers the down payment, loan and PMI trigger; pair it with the mortgage and affordability calculators to see the full monthly picture.
Frequently asked questions
How much is a 20% down payment?
20% of the home price. On a $350,000 home that's $70,000, leaving a $280,000 loan. This calculator works it out for any price and percentage.
Do I need 20% down?
No — many loans allow far less, some as little as 3–5%. But under 20% you'll typically pay PMI until you build enough equity, which adds to your monthly cost.
What is PMI?
Private mortgage insurance — an extra monthly charge lenders require on conventional loans when you put down less than 20%. It protects the lender and can be removed once you reach 20% equity.
What is loan-to-value?
The loan amount as a percentage of the home price. A 20% down payment gives an 80% LTV. Lower LTV generally means better rates and no PMI.