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Down payment amount
The headline cash figure. Divide percentages by 100 — ten percent is 0.10, not 10.
The Formula
Down Payment = Purchase Price x Down Payment Percentage
The headline cash figure. Divide percentages by 100 — ten percent is 0.10, not 10.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| P | Purchase price | currency | The agreed price. Lenders use the lower of price and appraised value, so a below-appraisal purchase changes the maths. |
| p | Down payment percentage as a decimal | decimal | 0.20 for twenty percent down; anything above it does not remove further requirements beyond the 80% LTV threshold. |
| DP | Cash due at closing toward the purchase | currency | Separate from closing costs and reserves, which are not part of this figure. |
What Each Symbol Means
Pcurrency
Purchase price
The agreed price. Lenders use the lower of price and appraised value, so a below-appraisal purchase changes the maths.
pdecimal
Down payment percentage as a decimal
0.20 for twenty percent down; anything above it does not remove further requirements beyond the 80% LTV threshold.
DPcurrency
Cash due at closing toward the purchase
Separate from closing costs and reserves, which are not part of this figure.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate a down payment page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate A Down Payment, filed under Finance. Every number the guide produces comes from substituting into this one line.