# Down Payment Calculator

> Converts a down payment given as an amount or a percentage of the home price into the loan amount and loan-to-value ratio, flags whether private mortgage insurance is likely (LTV above 80 %) and estimates its annual and monthly cost at a given PMI rate.

- Calculator id: `down-payment` · Category: Finance (`finance`) · Tool name: `calculate_down_payment`
- Canonical page: https://tttkmbb.com/finance/down-payment · This document: https://tttkmbb.com/finance/down-payment.md · JSON definition: https://tttkmbb.com/finance/down-payment.json

## Purpose

Converts a down payment given as an amount or a percentage of the home price into the loan amount and loan-to-value ratio, flags whether private mortgage insurance is likely (LTV above 80 %) and estimates its annual and monthly cost at a given PMI rate.

**Use when:** You want to know how much you will borrow and whether PMI applies for a given home price and down payment, or how much more cash reaches 20 % down.

**Do not use when:** You need the monthly mortgage payment (use mortgage-payment) or a savings plan to reach the down payment (use savings-goal).

## Input

| Parameter | Type | Unit | Required | Description |
| --- | --- | --- | --- | --- |
| `home_price` | number |  | required | Purchase price of the home. (> 0, max 10000000000) |
| `down_payment_amount` | number |  | optional | Down payment in currency; takes precedence over down_payment_percent when both are given. (min 0, max 10000000000) |
| `down_payment_percent` | number | % | optional | Down payment as a percent of home_price (used when down_payment_amount is omitted). (min 0, max 100) |
| `pmi_rate_percent` | number | % of loan/year | optional, default 0.75 | Annual private mortgage insurance premium as a percent of the loan amount; typical range 0.3–1.5 % depending on credit score and LTV. (min 0, max 5) |

## Output

| Field | Type | Unit | Description |
| --- | --- | --- | --- |
| `down_payment` | number |  | Down payment in currency. |
| `down_payment_percent` | number | % | down_payment / home_price × 100. |
| `loan_amount` | number |  | home_price − down_payment. |
| `loan_to_value_percent` | number | % | loan_amount / home_price × 100. |
| `pmi_likely` | boolean |  | True when LTV exceeds 80 % (conventional loans usually require PMI). |
| `estimated_annual_pmi` | number |  | loan_amount × pmi_rate_percent / 100 when PMI is likely, otherwise 0. |
| `estimated_monthly_pmi` | number |  | estimated_annual_pmi / 12. |
| `down_payment_for_20_percent` | number |  | 0.2 × home_price, the amount that avoids PMI on conventional loans. |
| `additional_needed_for_20_percent` | number |  | max(0, down_payment_for_20_percent − down_payment). |
| `assessment` | string |  | Plain-language note on the LTV and PMI status. |

## Formula

`down_payment = down_payment_amount or home_price × down_payment_percent/100; loan_amount = home_price − down_payment; LTV = loan_amount / home_price × 100; PMI likely if LTV > 80; annual_pmi = loan_amount × pmi_rate_percent/100`

The 80 % LTV threshold applies to conventional (Fannie Mae/Freddie Mac) loans; FHA loans charge mortgage insurance at any LTV and VA loans charge none. PMI rates vary with credit score, LTV and loan type, so the estimate is indicative only.

## Data Sources

- CFPB – What is private mortgage insurance? — https://www.consumerfinance.gov/ask-cfpb/what-is-private-mortgage-insurance-en-122/ (government, retrieved 2026-09-24)
- Wikipedia – Loan-to-value ratio — https://en.wikipedia.org/wiki/Loan-to-value_ratio (reference, retrieved 2026-09-24)
- CFPB – Owning a Home: loan costs and monthly payment components — https://www.consumerfinance.gov/owning-a-home/ (government, retrieved 2026-09-24)

Data freshness: `static`. Deterministic formula with fixed constants; results never go stale. Inputs supplied by the caller determine the output.

## API

- `GET https://tttkmbb.com/api/v1/calculate/down-payment?home_price=…`
- `POST https://tttkmbb.com/api/v1/calculate/down-payment` with JSON body `{"inputs": {…}}`
- Response: unified envelope (`success`, `request`, `result.values`, `result.units`, `sources`, `freshness`, `timestamp`, `next_actions`, `links`); see https://tttkmbb.com/docs/response-format.md
- Schema: https://tttkmbb.com/api/v1/calculators/down-payment · OpenAPI operationId `calculate_down_payment` in https://tttkmbb.com/openapi.json
- Authentication: none. Rate limit: fair use, see https://tttkmbb.com/docs/rate-limits.md.

## MCP

- Server: `https://tttkmbb.com/mcp` (Streamable HTTP, JSON-RPC 2.0, no auth)
- Tool:  `run_calculator` with `{"calculator_id": "down-payment", "inputs": {…}}`

## Example

- 350,000 home, 10 % down: inputs `{"home_price":350000,"down_payment_percent":10}` → `{"down_payment":35000,"down_payment_percent":10,"loan_amount":315000,"loan_to_value_percent":90,"pmi_likely":true,"estimated_annual_pmi":2362.5,"estimated_monthly_pmi":196.88,"down_payment_for_20_percent":70000,"additional_needed_for_20_percent":35000}`
- 500,000 home, 100,000 down: inputs `{"home_price":500000,"down_payment_amount":100000}` → `{"down_payment":100000,"down_payment_percent":20,"loan_amount":400000,"loan_to_value_percent":80,"pmi_likely":false,"estimated_annual_pmi":0,"additional_needed_for_20_percent":0}`

```
GET https://tttkmbb.com/api/v1/calculate/down-payment?home_price=350000&down_payment_percent=10
```

## Limitations

You need the monthly mortgage payment (use mortgage-payment) or a savings plan to reach the down payment (use savings-goal). The 80 % LTV threshold applies to conventional (Fannie Mae/Freddie Mac) loans; FHA loans charge mortgage insurance at any LTV and VA loans charge none. PMI rates vary with credit score, LTV and loan type, so the estimate is indicative only. All values are computed from the formula above; no measurement or live data is involved.

## FAQ

**When does PMI stop?**

Under the US Homeowners Protection Act you can request cancellation at 80 % LTV based on the original value, and the lender must cancel automatically at 78 % if payments are current.

**Is exactly 20 % down enough to avoid PMI?**

Yes: PMI is required when LTV is above 80 %, so a 20 % down payment (LTV = 80 %) avoids it on conventional loans.

## Related

- [Mortgage Payment Calculator](https://tttkmbb.com/finance/mortgage-payment.md) — Monthly payment on the resulting loan amount.
- [Savings Goal Calculator](https://tttkmbb.com/finance/savings-goal.md) — Monthly saving needed to reach the down payment.
- [Debt-to-Income Ratio Calculator](https://tttkmbb.com/finance/debt-to-income.md) — Check whether the payment fits lender DTI limits.