Enter your home price and a down payment percent or dollar amount to see your loan amount and whether PMI applies.
On a $400,000 home with 10% down, this page’s own default, the loan comes to $360,000 — and because the down payment sits below 20%, private mortgage insurance is required. At a typical 0.75% annual PMI rate, that is $225 a month, or $2,700 a year, added on top of principal and interest, for a benefit that protects the lender, not you.
Push the same purchase to 20% down — $80,000 — and the loan drops to $320,000 and PMI disappears entirely. The 20% line is not a suggestion or a round number for convenience; it is the specific threshold lenders use to decide whether the loan needs this extra layer of insurance at all.
Under the federal Homeowners Protection Act, a lender must automatically cancel PMI once the loan balance falls to 78% of the home's original value, purely through scheduled amortisation — no request needed. You can also request cancellation yourself once you reach 80%, though the lender can require an appraisal to confirm the value first. So a 10% down purchase is not paying PMI forever; it is paying it until enough principal is repaid (or the home appreciates enough) to cross that line, which the mortgage calculator’s amortisation schedule can show you the timeline for.
A larger down payment permanently reduces the loan and the interest paid on it, and clears PMI sooner or avoids it altogether — real, guaranteed benefits. But money tied up in a down payment is money that cannot do anything else: it cannot sit in an emergency fund, is not invested, and is not available if the roof needs replacing the month after closing. The mathematically clean way to weigh the trade-off is to compare the mortgage rate you are avoiding paying against the return you would reasonably expect from investing the difference instead — the same question the prepay-or-invest crossover answers for an existing loan.
A down payment below 20% is not automatically a mistake, either. Buying sooner rather than waiting years to save a larger sum has its own cost, particularly in a market where prices are rising faster than a saving rate can keep up with — PMI can be the price of not missing that window, not a penalty for being unprepared.
Conventional loans go as low as 3% down for qualifying first-time buyers, FHA loans allow 3.5%, and VA and USDA loans can reach zero down for eligible borrowers — see the VA mortgage calculator if that applies to you. Every one of these trades a smaller upfront cost for a larger loan, more interest over the life of the mortgage, and in most cases mortgage insurance of some kind (PMI, or FHA's own mortgage insurance premium, which behaves differently and does not always cancel the same way). None of that makes a low-down-payment loan a bad choice; it makes it a different trade-off than putting more down, worth running through this calculator with your own numbers rather than assuming either path is automatically right.
It depends on the loan type. Conventional loans can go as low as 3-5% down, but putting down 20% lets you avoid private mortgage insurance (PMI) entirely. FHA loans allow as little as 3.5% down, but they require mortgage insurance built into the loan regardless of how much you put down.
Private Mortgage Insurance (PMI) protects the lender if you default on the loan — it does not protect you. It's an added monthly cost that kicks in whenever your down payment is below 20% of the home price. On conventional loans, PMI can typically be removed once you reach roughly 20-22% equity in the home, either automatically under federal law or by requesting cancellation from your servicer once you qualify.
Not necessarily — it's a trade-off. A bigger down payment lowers your monthly payment and can eliminate PMI, but it also ties up cash that could otherwise be invested, kept as an emergency fund, or used for moving costs, repairs, and furnishing the new home. Whether a larger down payment is worth it depends on what else that money could be doing for you.
This tool answers a narrower question: given a home price and a down payment you choose, what's the resulting loan amount and PMI impact? If you're instead trying to work backward from your income and monthly budget to figure out a realistic home price in the first place, use the House Affordability Calculator.
Worked example: a $400,000 home with 10% down means a $40,000 down payment and a $360,000 loan amount. Since 10% is below the 20% PMI threshold, at an illustrative 0.75% annual PMI rate the estimated monthly PMI is 360,000 × 0.0075 ÷ 12 = $225/month.
The zero-down exception. VA loans, for eligible veterans and serving members, finance the full purchase price with no down payment and no monthly mortgage insurance — the trade is a one-time funding fee that can itself be rolled into the loan. If you qualify, the arithmetic above changes completely; see the VA mortgage calculator for what a no-deposit purchase actually costs monthly.