How this first-time homebuyer calculator works
The tool first subtracts the down payment from the purchase price. It then amortizes that principal and adds the property tax, homeowners insurance, and PMI estimates you enter. Cash to close is the down payment plus the chosen closing-cost percentage.
The formula
M = P × [r(1+r)^n] ÷ [(1+r)^n − 1]- M = monthly principal and interest
- P = purchase price minus down payment
- r = annual interest rate divided by 12
- n = total monthly payments
Understanding your results
The headline result estimates principal, interest, tax, insurance, and PMI. It does not include HOA dues, flood insurance, prepaid escrow, discount points, lender credits, maintenance, utilities, or state-specific assistance. Your Loan Estimate is the authoritative transaction-specific document.
PMI removal and low-down-payment loans
CFPB guidance says borrowers with many conventional mortgages may request PMI cancellation at 80% of original value, subject to conditions; automatic termination is generally scheduled at 78% when current. FHA loans follow different mortgage-insurance rules. HUD states FHA down payments can be as low as 3.5% for eligible borrowers.
Frequently asked questions about first-time buyer costs
How much are closing costs for a first-time homebuyer?
Closing costs typically range from 2% to 5% of the purchase price, excluding the down payment, according to the CFPB. Your actual total depends on the property, loan program, lender, local taxes, title charges, insurance, and any discount points or credits shown on your Loan Estimate.
How much cash do I need beyond the down payment?
Plan for closing costs plus moving, initial repairs, utility setup, and an emergency reserve. This calculator adds an adjustable closing-cost estimate to your down payment, but it cannot predict prepaid taxes, escrow funding, inspections, or location-specific transfer charges.
Does a 20% down payment eliminate PMI?
A conventional loan at 80% loan-to-value generally does not require borrower-paid PMI, but lender and loan terms control. FHA mortgage insurance works differently and VA-guaranteed loans do not require monthly PMI. Confirm every insurance charge in the lender’s disclosures.