Down Payment
How much you pay up front, the payment on the loan behind it, and the interest it carries.
Recent
Formula
How the calculation works
The deposit and the loan are two separate numbers and the page keeps them apart. On a 300,000 property with 20% down, the deposit is 60,000 and the loan 240,000; the 60,000 is not borrowed, so it does not carry interest and does not appear in the interest total.
The term does more work than the rate at these sizes. Stretching the same loan from 20 to 30 years cuts the monthly payment but adds tens of thousands to the interest, which is why both figures are reported side by side rather than the payment alone.
Common mistakes
- Choosing the term by the monthly payment alone. The payment is the visible number and the interest is the one that costs the most.
- Forgetting that a low deposit often triggers mortgage insurance in markets that require it, which raises the effective cost above the headline rate.
When to use it
- Use it when you know the price and the deposit and want the payment and the interest behind it in one view.
- It is also the tool for the deposit question itself: try 10, 20 and 30% down and watch both the loan and the interest fall.
Worked example
On a 300,000 property with 20% down: 60,000 down, a 240,000 loan, 1,439 a month and 278,012 in interest.
Common questions
What does a bigger deposit buy?
A smaller loan, so both the payment and the total interest fall. Many markets also add mortgage insurance below 20% down, which raises the cost.
Thirty years or fifteen?
A longer term lowers the payment and sharply raises the total interest. Run both terms here to see the gap directly.
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