Down payment amount and resulting loan.
Down Payment = P × (r / 100) Loan Amount = P − Down Payment
The down payment amount is calculated by multiplying the total purchase price by the down payment percentage expressed as a decimal. The loan amount is what remains after subtracting the down payment from the purchase price.
Both values together always equal the full purchase price, ensuring the math is balanced and easy to verify.
Down Payment = $350,000 × (20 / 100) = $350,000 × 0.20 = $70,000 Loan Amount = $350,000 − $70,000 = $280,000
Result: Down Payment = $70,000 | Loan Amount = $280,000
With a $350,000 home and a 20% down payment, you would need to pay $70,000 upfront. The remaining $280,000 would be your mortgage loan amount. Putting 20% down is significant because it typically allows you to avoid Private Mortgage Insurance (PMI), which can add hundreds of dollars to your monthly payment.
A down payment is the portion of a purchase price you pay directly from your own funds at closing or point of sale. The remaining balance is financed through a loan — most commonly a mortgage for real estate or an auto loan for vehicles.
| Purchase Type | Minimum Common % | Ideal % | |---|---|---| | Conventional Home Loan | 3–5% | 20% | | FHA Home Loan | 3.5% | 10%+ | | VA / USDA Loan | 0% | 0% | | Car Purchase | 10% | 20% |
FHA loans backed by the Federal Housing Administration allow down payments as low as 3.5% for borrowers with a credit score of 580 or higher. However, they require mortgage insurance premiums (MIP) for the life of the loan in many cases. Conventional loans allow you to drop PMI once you reach 20% equity.
Disclaimer: Results from this calculator are estimates for educational purposes only. Actual loan terms, required down payment minimums, and associated costs will vary by lender, loan type, credit score, and market conditions. Consult a licensed mortgage professional or financial advisor before making borrowing decisions.
Earnest money is a good-faith deposit made when submitting an offer on a home, typically 1–3% of the price. It is applied toward the down payment at closing. The down payment is the full upfront cash contribution made at the time of closing, separate from loan proceeds.
A higher down payment reduces your principal loan amount, which directly lowers your monthly payment. For example, on a $350,000 home at 7% interest over 30 years, a 10% down payment ($35,000) results in a higher monthly payment than a 20% down payment ($70,000) because the loan principal is $35,000 larger.
If a real estate deal falls through after earnest money is paid, whether you get it back depends on the contract contingencies. If the sale is canceled due to an unfulfilled contingency (like a failed inspection), the buyer typically gets a refund. If the buyer backs out without cause, the seller may keep it.
Yes. The same formula applies: multiply the car's purchase price by your chosen down payment percentage to find the upfront amount, and subtract it from the price to find the auto loan amount needed.
For a conventional loan, the minimum is typically 3–5% of the purchase price. FHA loans allow as low as 3.5% with a qualifying credit score. VA and USDA loans may require no down payment for eligible borrowers.
No, 20% is not required, but it is the threshold that typically eliminates the need for Private Mortgage Insurance (PMI) on conventional loans. Putting down less is possible but will usually increase your total borrowing costs.
Financial experts commonly recommend at least 10–20% down on a new car and 10% on a used car. A larger down payment reduces your monthly payment and helps you avoid being 'upside down' on the loan (owing more than the car is worth).
It can. A larger down payment lowers your LTV ratio, which reduces lender risk. This may qualify you for a lower interest rate, though the final rate also depends on your credit score, income, and current market rates.
Many loan programs allow gift funds, but specific rules apply. For conventional loans, the entire down payment can sometimes be a gift if you're putting down 20% or more. FHA loans also allow gifts, but require a gift letter. Check with your lender for specifics.
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