Down Payment Calculator
Calculate the required down payment for a property based on purchase price and loan type — conventional, FHA, or VA — with minimum down payment requirements.
Results
Visualization
How It Works
The down payment is the upfront cash you put toward a property purchase. Different loan types have different minimums: conventional loans typically require 20% (and 25% for investment properties), FHA loans require just 3.5%, and VA loans allow 0% down for eligible veterans. Putting less than 20% down usually triggers private mortgage insurance (PMI).
The Formula
Variables
- Property Price — The purchase price or appraised value of the property
- Down Payment % — Percentage of the property price paid upfront in cash
- Loan Amount — The remaining balance financed through a mortgage
- PMI — Private mortgage insurance — required when down payment is below 20%
- Loan Type — Conventional (standard), FHA (government-backed, low down payment), or VA (veterans, zero down)
Worked Example
You want to buy a $350,000 property with a conventional loan. The minimum down payment is 20%, so $350,000 x 0.20 = $70,000. If you put 25% down instead ($87,500), your loan drops to $262,500, avoiding PMI and getting a better rate. For an FHA loan, the minimum is just 3.5% = $12,250 — but you will pay mortgage insurance for the life of the loan.
Practical Tips
- Investment properties typically require 20-25% down — FHA and VA loans are for owner-occupied homes only.
- Putting 20% or more down eliminates PMI, saving $100-300/month on a typical loan.
- A larger down payment means a lower interest rate — lenders reward lower loan-to-value ratios.
- Do not drain your reserves for a bigger down payment — keep 6 months of expenses as a safety net.
- Gift funds can cover part of a down payment on primary residences but not investment properties.
Frequently Asked Questions
What is the minimum down payment for a rental property?
Most lenders require 20-25% down for investment properties. You cannot use FHA or VA loans for non-owner-occupied rentals. Some portfolio lenders may go as low as 15% with higher rates and PMI.
Can I avoid PMI with less than 20% down?
On conventional loans, PMI is required below 20% but can be removed once you reach 20% equity. FHA loans have permanent mortgage insurance. VA loans have no PMI at any down payment level.
Is a bigger down payment always better?
Not always. A bigger down payment reduces monthly costs and interest but ties up cash that could earn returns elsewhere. The optimal down payment balances cash flow needs, opportunity cost, and risk tolerance.
What is the difference between FHA and conventional?
FHA loans allow 3.5% down and more flexible credit requirements, but charge permanent mortgage insurance. Conventional loans require higher credit scores and 5-20% down, but PMI can be removed at 20% equity.
Do I need a down payment for a VA loan?
No. VA loans offer 0% down for eligible veterans, active-duty service members, and surviving spouses. There is no PMI, though there is a one-time VA funding fee (1.25-3.3% of the loan).