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Down payment and the amount borrowed
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The loan starts at home price minus down payment. That principal is what the schedule pays off.
A simple subtraction
Type the price and the cash you put down. The calculator does not add closing costs to either number. Borrowed principal is price minus down payment, and it cannot go below zero.
If the down payment is larger than the price, the loan is zero and there is no principal and interest. Tax, insurance, and HOA can still create a housing total.
PMI watches the ratio
The 80% test uses this principal against the price. Down payment of one fifth of the price clears PMI. A smaller down payment includes the monthly PMI you typed until the balance falls.
The down payment itself is not in the monthly total. It is cash at the start. The month shows the ongoing cost.
Offers share this principal
Both lenders in the comparison borrow this same principal. If one quote assumes a different down payment, change the down payment and compare again. Do not expect one offer box to hide a different loan size.
A larger down payment lowers the payment, the interest, and the dollar fee implied by an APR gap, because all three scale with the loan.
This explains how WiseCalculator treats the numbers you type. It is not a lender’s offer and it is not advice for your loan.
More in Home
- How long until the balance hits 80% of the priceThe calculator walks each payment until the balance is at or under 80% of the original price, then names that month.
- A loan that never reaches 80% of the priceIf the schedule finishes, a normal amortizing loan does reach any balance below the start. A warning means the inputs do not produce that path.
- Holding a mortgage for seven yearsA seven-year hold counts interest for 84 months plus upfront fees. Interest after that is left out.