Down Payment Calculator

How Does the Down Payment Calculator Work?

*This calculator is only useful in case the purchase is attached to a loan!

The down payment calculator is used to help financially plan for major purchases, by simply determining the amount required for the down payment which can aid in forming a budget, examples of large purchases may include buying a new home or vehicle.

Need help budgeting? Consider reading our article on how to create a budget! (link)

Why Use the Down Payment Calculator?

Using the down payment calculator is an integral part of the understanding of major financial transactions, particularly in real estate. It gives users the ability to assess the feasibility and implications of different down payment amounts on their finances. Entering variables like purchase price, loan terms, and down payment percentage, many can quickly find the most suitable down payment scenario, tailored to your budget and long-term goals. Whether aiming to minimize mortgage payments, negotiate loan terms, or accurately gauge affordability, the down payment calculator serves as a vital tool in making informed decisions that align with one's financial goals. Its utility lies in offering clarity and foresight, sending many on homeownership journeys with confidence and prudence.

A Brief History of Banks

Banks have been a fundamental part of society since ancient times. Early banking began almost four millennia ago around 2,000 B.C. in Mesopotamia, temples were used as repositories for valuables, and records of transactions were kept. Later Greek and Roman civilizations adopted basic banking systems, the first modern bank was erected during the Renaissance in Italy. The Medici family built the first bank in the year 1397 in the city of Florence Italy. The rise of central banks was seen in the 17th century, for example, the Bank of England in 1694, to structure national finances. During the 20th century in the Great Depression, financial regulations like the Glass-Steagall Act of 1932 in the United States, allowed banks of the Federal Reserve to lend to five or more Federal Reserve system members or any individual member bank with a capital stock not exceeding five million dollars, against collateral. This forced commercial banks to refrain from investment activities and protect depositors from losses. Banks still play key roles in economies around the world, giving many financial institutions the ability to grow their economies.

Input Fields Explained

• Purchase price($): This is the total cost of the purchase.
• Down payment percentage(%): This is the percentage taken from the total amount of a purchase.
• Loan term(years): This is the length of time relative to the term of the loan.

Example:

Down payment = (5% or .05) * Purchase price = ($10,000)

Down payment = $500

Understanding the Results

Once the required fields have been entered and the "Calculate" button has been clicked, the down payment calculator will provide an answer. Below is a helpful example and demonstration of how the down payment calculator functions!