Down Payment Calculator
Price and deposit percent — the cash down and the loan that remains.
How this is calculated
down = price × percent ÷ 100; loan = price − down
Worked example: $300,000 at 20% → a $60,000 deposit and a $240,000 loan. Nudge the percent to see how each point of deposit shrinks the loan you’ll carry.
What a bigger deposit actually buys you
A deposit does three things at once, and only the first is obvious. It reduces the amount borrowed, so both the instalment and the total interest fall. It usually improves the interest rate offered, because a lower loan-to-value ratio means less risk for the lender — the improvement can be worth more than the reduced balance. And it can remove mandatory mortgage insurance where that applies, which in some markets is a substantial monthly cost that buys the borrower nothing.
Loan-to-value thresholds tend to be step functions rather than smooth curves, so pushing a deposit from 19% to 20% can be worth far more than the extra one percent suggests. Ask the lender where their bands sit before deciding how much to put down.
Negative equity, and why the deposit is a buffer
Buying with a very small deposit means a modest fall in property values leaves you owing more than the property is worth. That matters only if you need to sell or refinance — which is exactly when it matters most, since job moves and rate shocks arrive at inconvenient times. A larger deposit is insurance against having your options removed.
Do not empty the account to enlarge the deposit
The most common mistake among first-time buyers is putting every available rand into the deposit and moving in with nothing behind them. A house generates costs immediately: transfer duty and attorney fees, bond registration, moving, connection fees, and the repairs that reveal themselves in the first month. Retaining an emergency fund of three to six months of expenses after the deposit and all costs is worth more than the marginally better rate a larger deposit would have secured.
Where the deposit comes from matters to the lender
Lenders verify the source of a deposit as part of anti-money-laundering obligations, and they treat gifted funds differently from saved ones — typically requiring a letter confirming the money is a gift rather than a loan, since a hidden loan changes your affordability. Money that appeared recently in an account will attract questions. Season the funds and keep the paperwork; a deposit you cannot document can delay or sink an application.
Frequently asked questions
Why does 20% down matter?
On a home, a 20% deposit usually avoids mortgage insurance (PMI in the US) and unlocks better rates, because the lender’s risk is lower. Below 20%, expect extra monthly cost until your equity crosses that line.
Is a bigger deposit always better?
A bigger deposit lowers the loan, the payment and total interest — but don’t drain your emergency fund to get there. Keep a cash buffer; a slightly smaller deposit with savings intact beats being house-rich and cash-poor.