How much does a larger down payment reduce your mortgage payment?
With an unchanged rate and term, the principal-and-interest payment changes in direct proportion to the amount borrowed. The cash needed to buy the home still requires a separate budget.
Mortgage calculator →Separate the price from the loan
A home priced at 300,000 with a 60,000 down payment leaves a 240,000 loan. Increasing the down payment to 90,000 reduces borrowing to 210,000. That is a 12.5% reduction in principal, not a reduction in the price of the property. The calculation assumes that purchase costs are not added to the mortgage.
Hold the financing assumptions constant
Keep the annual rate, interest convention, repayment term and extra-payment setting identical. If the first scenario has a 1,400 payment, the second payment is 1,400 × 210,000 / 240,000 = 1,225, a reduction of 175. The 1,400 figure is an illustrative baseline rather than a bank quote. The proportional result follows from the fixed-payment loan formula and is useful as a quick check on two calculator runs.
Allow for offers that change with the down payment
A lender may offer different rates or insurance terms at different loan-to-value ratios. In that case, calculate each actual offer separately instead of scaling the old payment. A larger down payment also leaves less available cash for closing costs, moving and repairs. Use the savings-goal calculator to plan the deposit while keeping a separately identified emergency reserve.
Try the calculators
- Mortgage calculator
Understand your monthly payment and the true cost of a home.
- Savings goal calculator
Find the monthly deposit needed to reach a savings target.
- Loan calculator
Compare terms and see what borrowing will cost.