Reduce Your Monthly Mortgage Payments By Increasing Your Down Payment The size of your mortgage payment is determined by two factors - the interest rate and how much you borrow. There is little you can do to reduce interest rate. However, you can reduce your mortgage payment by having a larger down payment. Using an automatic savings plan is the easiest way to build your down payment. Here is a chart showing the affect of having a larger down payment for a home costing $250,000 (assumes an interest rate of 6.5% and a 30 year amortization). Cost of the home Down payment Mortgage Amount Monthly payment $250,000 $25,000 $225,000 $1,422 $250,000 $50,000 $200,000 $1,264 $250,000 $65,000 $185,000 $1,169 $250,000 $75,000 $175,000 $1,106 $250,000 $100,000 $150,000 $948 Here is a calculator you can use to determine monthly payments for different size loans and different interest rates. Monthly Mortgage Payment Calculator Cost of the home $ Down payment saved so far $ Annual interest rate % Mortgage amortization (in months) Mortgage amount $ Monthly mortgage payment $ You may already have some savings, but establishing a disciplined savings habit can help you increase those savings, increase your down payment and reduce your monthly mortgage payment. Saving is Easier with an Automatic Savings Plan Decide how much you want to save and over what period. Then find out how much you need to put aside each month to have the larger down payment you want. Save to increase your down payment Amount you want to save $ Interest rate you expect to earn % How many months to save Monthly savings needed $ Interest is compounded monthly. This calculator is to be used for estimation purposes only. The financial institution is not responsible for its accuracy and the results are not guaranteed. Start Your Automatic Savings Today There is no easier way to save than with an automatic savings plan. If you are already using direct deposit for your paycheck, have your financial institution transfer the amount each month. You can also have your employer deduct the amount each month and deposit into the account of your choice with a payroll deduction program. Ask your employer for the form to start now.