How Much Earnest Money Should You Put Down?
When your offer is accepted, the seller wants proof you are serious — that proof is earnest money: a good-faith deposit, typically 1–3% of the price, held in escrow and credited toward your purchase at closing.
This free calculator turns your home price and deposit percentage into a dollar amount, then shows the remaining down payment and total cash needed at closing (including estimated closing costs). Everything runs privately in your browser.
Home price × percentages → cash needed
Please enter a positive home price and percentages between 0 and 100.
The deposit is held in escrow and credited toward your down payment or closing costs at settlement. Backing out without a valid contingency can forfeit it — confirm financing, inspection, and appraisal deadlines in writing.
How to Use This Calculator
- Enter the home price — your offer amount.
- Set the earnest money percentage — 1% is cautious, 2–3% is competitive in most markets.
- Add down-payment % and closing-cost % to see the full cash picture.
- Click Calculate Deposit — read your earnest money, remaining down payment and total cash at closing.
The Formula
Total cash at closing ≈ (Home price × Down-payment %) + Closing costs − Earnest money
Worked example: $400,000 home, 2% earnest money, 10% down, 3% closing costs. Earnest money = $8,000. Down payment = $40,000. Closing costs = $12,000. Cash due at closing ≈ $40,000 + $12,000 − $8,000 = $44,000.
Typical Earnest Money by Market
| Market type | Typical deposit |
|---|---|
| Buyer’s market | 1% |
| Balanced market | 1–2% |
| Seller’s market / competitive | 2–3% |
| “As-is” or investor deals | 3–5%+ |
Protecting your deposit
- Contingencies are your shield: inspection, financing and appraisal contingencies let you walk away with your deposit if the deal sours.
- Never go non-refundable unless you fully accept the risk — waiving contingencies is the main way buyers lose deposits.
- Use escrow, not the seller: the deposit should sit with a neutral third party (title company or broker).
- Mind the deadlines: contingency periods are calendar days — miss one and your protection can lapse.
Deposit Amounts at a Glance
| Home price | 1% | 2% | 3% | 5% |
|---|---|---|---|---|
| $250,000 | $2,500 | $5,000 | $7,500 | $12,500 |
| $400,000 | $4,000 | $8,000 | $12,000 | $20,000 |
| $600,000 | $6,000 | $12,000 | $18,000 | $30,000 |
Read the table with the market guidance above: the left columns fit calm markets, while the right columns are what competitive bidding wars demand. Whichever column you land in, the amount is credited back to you at closing — it is a deposit, not a fee.
Frequently Asked Questions
Is earnest money refundable?
Usually yes — if you cancel within a contingency period (inspection, financing, appraisal), you get it back. If you walk away without a contractual reason, the seller may keep it as liquidated damages.
Does earnest money count toward the down payment?
Yes. It’s credited toward your purchase at closing — it’s part of what you pay, not on top of it. A $8,000 deposit on a $40,000 down payment means $32,000 more due at closing.
How much earnest money is normal?
1–3% of the purchase price in most US markets. Hot markets push toward 2–3% or more; a larger deposit signals a serious, well-qualified buyer.
Who holds the earnest money?
A neutral escrow holder — typically the title company, closing attorney, or listing broker — never the seller directly.
When is earnest money due?
Usually within 1–3 business days of the signed contract (your state’s standard contract sets the deadline). Missing it can put you in breach.
What happens to earnest money at closing?
It’s applied to your down payment and closing costs on the settlement statement, reducing the cash you bring to the table.
Can I lose my earnest money if the appraisal comes in low?
Not if your contract has an appraisal contingency — you can renegotiate or walk away with your deposit inside the contingency window. If you waived the appraisal contingency (common in bidding wars), a low appraisal can put the deposit at risk unless you cover the gap in cash.
Final Thoughts
Earnest money is a small number with outsized signaling power: the right deposit strengthens your offer without overexposing you. Size it to your market, protect it with contingencies, and keep it in escrow.
Try our mortgage calculator.