About the Earnest Money Calculator
This earnest money calculator works out the good-faith deposit you put down when a seller accepts your offer on a home, and shows how that money is credited back to you at closing. Enter the purchase price, the earnest money percentage you plan to offer, your down payment and estimated closing costs, plus any seller credit you have negotiated.
Earnest money is commonly 1% to 3% of the price, though it can be a flat amount and runs higher in competitive markets or for new construction. It is held in escrow by a title company, closing attorney or brokerage, and at closing it counts toward your down payment and closing costs — it is not an extra fee. The calculator shows the deposit, the total cash you need to close, and the balance still due on closing day after the earnest money is applied.
Use it when writing an offer, when your agent asks how strong a deposit to make, or when planning how much cash to have ready in two stages. Remember that earnest money can be forfeited if you back out for a reason not covered by a contingency (such as financing, inspection or appraisal), so read the contract terms carefully.
With the default inputs, the earnest money deposit is $8,000.00. Change any value above to recalculate instantly.
How to use the earnest money calculator
- 1Enter the price you are offering on the home.
- 2Choose an earnest money percentage — ask your agent what is typical locally.
- 3Enter your down payment and estimated closing costs as percentages.
- 4Add any seller credit you have negotiated.
- 5Note the deposit due at offer and the balance you will need on closing day.
Formula and method
The earnest money deposit (EMD) is the purchase price multiplied by the percentage you offer. Total cash needed to close is the down payment (price × down payment %) plus closing costs (price × closing cost %), less any seller credit, which cannot exceed your actual closing costs.
Because the earnest money is held in escrow and credited to you on the Closing Disclosure, it reduces what you bring to closing one-for-one. If the deposit is larger than your total cash to close (for example with a very small down payment), the excess is normally returned to you at closing.
- EMD
- Earnest money deposit
- EM%
- Earnest money as a percentage of the price
Worked examples
$400,000 home, 2% earnest money, 10% down
A 2% deposit on $400,000 is $8,000. You need $40,000 down plus $12,000 of closing costs, $52,000 in total. The $8,000 is credited at closing, so you bring the remaining $44,000.
FHA buyer with a seller credit
Earnest money of 1% is $3,000. A 3.5% down payment ($10,500) plus $12,000 closing costs, less a $6,000 seller credit, needs $16,500 in total; after the deposit, $13,500 is due at closing.
Competitive offer: 5% earnest money on $650,000
A strong 5% deposit is $32,500. With 20% down ($130,000) and $16,250 in closing costs you need $146,250, so $113,750 is still due at closing.
Frequently asked questions
How much earnest money is typical?+
Earnest money is commonly 1% to 3% of the purchase price, though some areas use a flat amount. In competitive markets buyers often offer more to show they are serious; your agent can tell you what is normal locally.
Does earnest money go toward the down payment?+
Yes. Earnest money is held in escrow and credited to you at closing, reducing the cash you bring for the down payment and closing costs. It appears as a credit on your Closing Disclosure.
Can I get my earnest money back?+
Usually yes if the deal falls through under a contract contingency — for example a failed inspection, low appraisal or loan denial — within the deadlines in the contract. If you back out for another reason, the seller may keep it.
Who holds the earnest money?+
A neutral third party, usually a title company, escrow company, closing attorney or the listing brokerage, holds the deposit in an escrow or trust account until closing or until the contract is cancelled.
Is earnest money the same as a down payment?+
No. Earnest money is a deposit paid soon after your offer is accepted to show good faith; the down payment is your equity paid at closing. The earnest money simply counts toward it.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.