Down Payment vs. Monthly Mortgage Payment
See how changing the down payment changes the amount borrowed and the principal-and-interest payment.
A larger down payment reduces the amount borrowed. For a fixed-rate mortgage, reducing the starting balance generally reduces the scheduled principal-and-interest payment and the interest that accrues over the life of the loan.
Example
Suppose a home costs $400,000. A $40,000 down payment leaves $360,000 to finance before other costs. A $80,000 down payment leaves $320,000. The difference in payment depends on the APR and term.
What a larger down payment does not change
A down payment does not by itself determine the interest rate, property taxes, homeowners insurance, or every loan fee. Those items need to be considered separately.
Compare the scenarios
Use the ClearRateUS mortgage calculator to keep the APR and term constant while changing only the down payment. Then compare the monthly principal-and-interest payment, total interest, and total paid.
Test your own amount, APR, down payment, and term.
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