Down Payment Calculator · Practical guide
5% Down vs 20% Down: Full Comparison
The smaller down payment frees $60,000 in cash — and costs about $537 more per month. Here is the full math.
At a glance
The Headline Numbers
On a $400,000 home with a 30-year fixed rate of 6.5%, 5% down is $20,000 and 20% down is $80,000. The 5% path keeps $60,000 in your pocket but raises the total monthly housing cost from $2,022.62 to $2,560.19 — about $537 more every month, once PMI is included.
Interactive tool
Down Payment Calculator
Enter your own values, then compare the result with the examples below.
Side-by-Side Comparison
| 5% Down | 20% Down | |
|---|---|---|
| Down payment | $20,000 | $80,000 |
| Loan amount | $380,000 | $320,000 |
| Monthly principal & interest | $2,401.86 | $2,022.62 |
| Estimated PMI | $158.33/mo | None |
| Total monthly | $2,560.19 | $2,022.62 |
| Total interest over 30 years | $484,669 | $408,142 |
What the Extra $537 a Month Buys You
The 5% down route gets you into the home years sooner and leaves cash for closing costs, furniture, and emergencies. The 20% route saves roughly $76,527 in interest over the life of the loan, eliminates PMI entirely, and gives you instant equity — a buffer if prices dip. PMI also is not forever: once the balance drops to 80% of the original value you can request removal, and at 78% it typically falls off automatically.
Which Is Right for You?
- Choose 5% if waiting to save $80,000 means years of rising rents and prices, or if the $60,000 earns more elsewhere than the 6.5% it saves.
- Choose 20% if you already have the cash, want the lowest payment, or plan to stay in the home long enough to enjoy the interest savings.
Run both scenarios in the calculator above with your actual rate — at higher rates the gap widens, and at lower rates it narrows.
Frequently Asked Questions
Is it dumb to put only 5% down?
Not necessarily. Most first-time buyers put down under 10%. The real question is whether the higher payment fits your budget and whether the cash you keep has a better use.
How long does PMI last with 5% down?
On a 30-year loan at 6.5% starting with 5% down, reaching 78-80% loan-to-value through payments alone takes roughly 8 to 11 years, though home appreciation can get you there sooner with an appraisal.
Does a bigger down payment get me a better rate?
Often, yes. Lenders price loans in loan-to-value tiers, and 20% down frequently qualifies for a lower rate than 5% down — on top of the savings shown here, which assume the same 6.5% rate for both.
What if I put 10% down as a compromise?
On the same $400K home, 10% down means a $360,000 loan, $2,275.44 in principal and interest, and about $150 in PMI — $2,425.44 total, splitting the difference between the two extremes.