Calculate required down payment amounts for different LTV ratios and see how down payment size affects monthly payments and PMI.
A home's price is split here into the portion paid upfront and the portion borrowed. Enter the purchase price and financing assumptions, then compare down payment choices through their resulting loan-to-value (LTV) ratios, loan amounts, estimated monthly payments, and PMI impact. The key relationship is that a lower LTV requires more cash upfront but finances less principal. The common surprise is that the down payment is not the same as cash needed at closing; closing costs and prepaid expenses can be separate.
A concrete input and expected output from the current implementation.
Input
Home price: $250,000; compare 80% LTV; annual interest rate: 6.00%; loan term: 30 years
Expected output
Required down payment: $50,000; loan amount: $200,000; monthly principal and interest: $1,199.10
At 80% LTV, $250,000 x 0.80 = $200,000 borrowed, leaving $50,000 down. Amortizing $200,000 over 360 monthly payments at 0.5% interest per month produces a principal-and-interest payment of $1,199.10.
For a chosen LTV, the loan amount equals the home price multiplied by LTV expressed as a decimal. The required down payment is the home price minus that loan amount. Conversely, a down payment percentage implies an LTV of 100% minus that percentage, assuming no other loan is included in the calculation.
Each scenario applies the same interest-rate and term assumptions to a different loan balance, showing how principal and interest change with the amount financed. PMI is presented as an additional cost where applicable. Because an actual PMI premium can depend on borrower, property, and loan details beyond LTV, treat it as an estimate rather than a lender quote.
The payment is based on the amount borrowed, not on the down payment itself. Moving from 10% down to 20% down changes the loan from 90% of the price to 80%, a reduction of about 11.1% in principal, not 50%. A change in PMI can increase the total difference, but its size is not universal.
No. It can illustrate how PMI affects a down payment comparison, but lender requirements and premiums depend on the mortgage product and underwriting details. A scenario showing no PMI is not an approval or waiver. Confirm the requirement, premium, and cancellation terms with the lender, including whether another form of mortgage insurance applies.
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