A down payment calculator turns a home price and a percentage into the three numbers a buyer actually needs: the cash down, the mortgage loan, and the loan-to-value (LTV) ratio that decides your rate and whether you'll pay mortgage insurance. The math is simple — down = price × % and loan = price − down — but the consequences aren't: crossing the 20%-down / 80%-LTV line is what typically removes PMI and unlocks a better rate.
Reviewed: June 20, 2026 · Author: Naveen P N, Founder — AI Calculator · Verified against: standard LTV definition, recomputed in code. Not financial advice.
The down-payment math
Everything follows from the price and the percentage. The LTV is just the mirror image of your down payment — 20% down is 80% LTV, 10% down is 90% LTV. Lenders use LTV as their risk gauge: above 80% they usually require PMI on a conventional loan, an extra monthly cost that falls away once the balance reaches 80% LTV. You can also run it backward: a fixed amount saved ÷ price gives the percentage you can put down.
Worked example — $400,000 home, 20% down
Scenario: home price $400,000, putting 20% down.
Twenty percent down is $80,000, leaving a $320,000 mortgage at exactly 80% LTV — the line where PMI typically drops off. See how lower down payments change it on the same home: 10% down is $40,000 (a $360,000 loan at 90% LTV, with PMI), and 5% is just $20,000 (a $380,000 loan at 95% LTV). Each step up in down payment shrinks the loan, the monthly payment and the lifetime interest — which is exactly why buyers often stretch to reach the 20% mark.
Frequently Asked Questions
Price × percentage. $400,000 × 20% = $80,000, leaving a $320,000 mortgage.
Loan ÷ price, i.e. 100% − down %. 20% down = 80% LTV. Lower LTV usually means a better rate.
No — many loans allow 3–5%. But under 20% (LTV over 80%) usually adds PMI until you reach 80%.
Private mortgage insurance — an extra monthly cost under 20% down, cancellable at 80% LTV.
It cuts loan, payment and interest and can drop PMI — but keep a cash cushion too.