CalculateY
Quick Answer
For a $400,000 home with 20% down and 3% closing costs, the estimated down payment is $80,000, the estimated loan amount is $320,000, estimated closing costs are $12,000, and the estimated total cash needed at closing is approximately $92,000.
Typically 2% to 5% of the home price.
Common Examples
| Input | Result |
|---|---|
| $400,000 home, 20% down, 3% closing costs | Estimated down payment: $80,000, estimated total cash: approximately $92,000 |
| $300,000 home, 10% down, 3% closing costs | Estimated down payment: $30,000, estimated total cash: approximately $39,000 (PMI required) |
| $500,000 home, 5% down, 4% closing costs | Estimated down payment: $25,000, estimated total cash: approximately $45,000 (PMI required) |
| $350,000 home, 25% down, 2.5% closing costs | Estimated down payment: $87,500, estimated total cash: approximately $96,250 |
| $250,000 home, 3.5% down, 3% closing costs | Estimated down payment: $8,750, estimated total cash: approximately $16,250 (PMI required) |
How It Works
This calculator uses straightforward percentage-based formulas to estimate the cash needed to purchase a home:
Down Payment = Home Price x (Down Payment % / 100)
Loan Amount = Home Price - Down Payment
Closing Costs = Home Price x (Closing Cost % / 100)
Total Cash Needed = Down Payment + Closing Costs
Where:
- Home Price = the purchase price of the property
- Down Payment % = the percentage of the home price paid upfront
- Closing Cost % = estimated closing costs as a percentage of the home price (typically 2% to 5%)
- Total Cash Needed = the total amount you need available at the time of closing
Common Down Payment Amounts
The traditional recommendation is 20% down, which avoids the need for private mortgage insurance (PMI). However, many loan programs accept lower down payments. FHA loans require as little as 3.5% down. Conventional loans may accept 3% to 5% down for qualified buyers. VA and USDA loans may require 0% down for eligible borrowers. Lower down payments mean a larger loan and higher monthly payments.
Private Mortgage Insurance (PMI)
When the down payment is less than 20% of the home price, conventional lenders typically require PMI. This insurance protects the lender if the borrower defaults. PMI usually costs between 0.5% and 1.5% of the original loan amount per year, added to the monthly mortgage payment. PMI can generally be removed once the homeowner reaches 20% equity through payments or appreciation.
Closing Costs
Closing costs cover a range of fees including loan origination, appraisal, title insurance, recording fees, prepaid property taxes, and homeowner’s insurance. The total typically ranges from 2% to 5% of the home price, with the national average around 3%. Some of these costs may be negotiable, and some sellers may agree to cover a portion of closing costs as part of the purchase agreement.
Worked Example
For a $400,000 home with 20% down and 3% estimated closing costs: Down Payment = $400,000 x 0.20 = $80,000. Loan Amount = $400,000 - $80,000 = $320,000. Closing Costs = $400,000 x 0.03 = $12,000. Total Cash Needed = $80,000 + $12,000 = $92,000. Since the down payment is exactly 20%, PMI is not required.
For a $300,000 home with 10% down and 3% closing costs: Down Payment = $300,000 x 0.10 = $30,000. Loan Amount = $300,000 - $30,000 = $270,000. Closing Costs = $300,000 x 0.03 = $9,000. Total Cash Needed = $30,000 + $9,000 = $39,000. Since the down payment is below 20%, PMI is likely required, adding an estimated $112 to $337 per month (0.5% to 1.5% of $270,000 / 12).
Related Calculators
Home Affordability Calculator
Estimate how much house you can afford based on income, debts, down payment, and current interest rates.
Mortgage Calculator
Estimate your monthly mortgage payment, total interest, and total cost based on loan amount, interest rate, and term.
Property Tax Calculator
Estimate annual and monthly property taxes based on assessed value, mill rate, and exemptions.