Down Payment Analyzer
Compare different down payment scenarios to find the best option for you
Down Payment Comparison
Scenario 1
Scenario 2
Investment Impact Analysis
Understanding the Calculations
💰 Cash Difference
Formula: Higher Down Payment - Lower Down Payment
Shows the cash difference between the two down payment scenarios. This is the amount available for investment if you choose the lower down payment option.
📈 Investment Value
Formula: Cash Saved × (1 + rate/12)^months
Shows how your saved cash grows if invested at your specified return rate using monthly compound interest over the loan term.
💸 Investment Gains
Formula: Investment Value - Cash Saved
The profit from investing your saved cash. This is pure investment return above your initial amount.
🏦 Total Interest
Formula: (Monthly Payment × Months) - Principal
The total cost of borrowing over the life of the loan. Higher down payments mean less borrowing and less interest.
🎯 Net Benefit
Formula: Investment Gains - Extra Interest Cost
Shows if you're financially better off choosing the lower down payment and investing the saved cash. Positive = you make money by choosing the lower down payment option.
🛡️ PMI (if < 20% down)
Formula: Loan Amount × 0.75% / 12
Private Mortgage Insurance required for down payments under 20%. Typically 0.5-1% of loan amount annually.
Example: 5% vs 20% down on $500K home (6.5% mortgage, 7% investment return):
- 5% down: $25,000 | 20% down: $100,000
- Cash difference: $75,000
- After 30 years at 7%: $75,000 → $571,173
- Investment Gains: $496,173
- Extra Interest from lower down payment: ~$85,292
- Net Benefit: $410,881 (You're ahead by choosing lower down payment!)
This shows you're $410,881 better off putting down only 5% instead of 20% and investing the $75K difference.