Calculate Your Down Payment and Connect with Top Lenders
Use the FREEandCLEAR Down Payment Mortgage Calculator to determine the down payment and estimated total amount of up-front money required to purchase a property. When you submit` your information we connect you with up to four leading lenders so that you can confirm your mortgage terms and compare multiple proposals to find the mortgage that is right for you. We also offer a version of this calculator that does not require personal information
Monthly Housing Payments
- Loan Type
Down Payment to Buy a Home
Most Lenders Require a Down Payment of 10% - 20% of the Home Purchase Price
Most lenders require a minimum down payment of 10% - 20% to qualify for a mortgage and 20% to receive the lowest interest rate from the lender. For example, if you are buying a home for $100,000 you would be required to make a down payment of $20,000 to receive the best mortgage terms from the lender ($100,000 (property value) * 20% (down payment) = $20,000). The down payment requirement may change based on mortgage program and loan amount with some lenders requiring higher down payments on jumbo loans. The down payment requirement can vary by lender so borrowers should contact multiple lenders to understand their policies.
Low / No Down Payment Mortgage Programs
While 10% - 20% is the required down payment for most mortgages, there are multiple no and low down payment mortgage programs that enable borrowers to buy homes with little or no money down. For example, the USDA and VA home loan programs enable you to buy a home with no down payment, the HomeReady and Home Possible mortgage programs enable you to buy a home with a 3.0% down payment and the FHA mortgage program enables you to buy a home with a 3.5% down payment. Many large banks or credit unions also offer their own low down payment mortgage programs. In some cases, these programs may require borrowers to pay additional fees or a higher interest rate but they make owning a home more attainable for more borrowers.
Your Down Payment and Mortgage Insurance
If you make a down payment of less than 20% of the property purchase price you are typically required to pay some form of mortgage insurance, which protects the lender in the event you default on your loan. For conventional loans, borrowers pay private mortgage insurance (PMI) which is an additional ongoing monthly fee on top of your mortgage payment. In some cases borrowers pay PMI as a separate monthly fee (borrower paid PMI) and in other cases borrowers pay PMI by paying a higher interest rate (lender paid PMI) FHA and USDA mortgage borrowers are required to pay an upfront and ongoing mortgage insurance premium while VA mortgage borrowers are only required to pay an upfront funding fee. The amount of mortgage insurance varies depending on the mortgage program and other factors such as credit score and loan-to-value (LTV) ratio. Borrowers should understand how mortgage insurance increases their upfront and ongoing monthly mortgage costs if they make a down payment of less than 20%.
In addition to your down payment, borrowers are required to pay for mortgage closing costs and potentially hold savings in reserve when the loan closes. Closing costs vary depending on your loan amount and property value and can run thousands of dollars. Additionally, some lenders and mortgage programs require borrowers to maintain a minimum amount of savings in reserve at the time your mortgage closes. Although it may not be required by your lender, FREEandCLEAR recommends that you hold enough savings in reserve to cover three-to-six months of total monthly housing expense. For example, if your total monthly housing expense is $1,500, you would keep at least $4,500 in reserves at the time your mortgage closes. Borrowers should understand the total amount of funds required to pay for their down payment, closing costs and savings in reserve to make sure they have sufficient funds to qualify for a mortgage.
More FREEandCLEAR Mortgage Resources
Review our comprehensive explanation of what size down payment you need to buy a home including informative examples
Review and understand multiple government-backed and conventional low or no down payment mortgage programs to understand key borrower benefits, program eligibility and qualification requirements.
Compare mortgage rates and fees from top lenders near you. Comparing proposals from multiple lenders is the best way to find the mortgage that is right for you
Got mortgage questions? We love answering them. Submit your mortgage questions and receive an informative response within 24 hours