Down Payment Calculator

The 20% down rule is a myth for most modern loans:

• Conventional loans go as low as 3% for first-time buyers
• FHA requires 3.5% with fair credit
• VA and USDA loans offer 0% down for eligible borrowers
• Only jumbo loans typically demand 10-20%

The median first-time US home buyer puts down 6-8%, not 20%.

The trade-off is private mortgage insurance (PMI) — required when you put less than 20% down on a conventional loan — which adds $30-$125/month per $100,000 borrowed.

Our down payment calculator shows the exact PMI cost at your chosen percentage so you can weigh waiting longer to save 20% vs. buying sooner and paying PMI until you reach 80% loan-to-value.

A $400,000 home with 20% down means $80,000 in cash plus another $8,000-$20,000 in closing costs.

Saving $1,500/month in a 4% APY high-yield account reaches $80,000 in roughly 34 months starting from $25,000 — compound interest alone adds about $4,000 over that window. Bumping the monthly contribution to $2,000 cuts the timeline to about 26 months.

Accelerators that matter:

• automate transfers on payday
• check state housing finance agency assistance programs (many offer $5,000-$25,000 grants to first-time buyers)
• ask family about documented gift funds (allowed on conventional and FHA loans)
• redirect one large recurring expense — paid-off car, a cheaper rental — directly into savings

Your target down payment is simply Home Price × Down Payment %, and the gap is that target minus what you've already saved.

For a $400,000 home at 20%, the target is $80,000; with $25,000 saved, the gap is $55,000.

To find the timeline, divide the gap by your monthly contribution, then let compound interest from a high-yield savings account shorten it slightly. Saving $1,500 a month at 4% APY closes a $55,000 gap in about 34 months.

The calculator solves this annuity math for you and returns an exact target date so you can plan a realistic purchase window.

Minimum down payments vary widely by program:

• Conventional loans — via Fannie Mae's HomeReady and Freddie Mac's Home Possible — go as low as 3% for first-time buyers (5% is common)
• FHA requires 3.5% with a 580+ credit score
• Jumbo loans above the conforming limit typically demand 10-20%
• VA loans for eligible veterans and active military, and USDA loans in qualifying rural areas, allow 0% down

Each path has trade-offs in mortgage insurance, credit requirements, and property eligibility.

The right choice balances how much cash you have now against the ongoing cost of insurance and the rate you'll qualify for — compare them side by side before committing.

Put less than 20% down on a conventional loan and you'll pay private mortgage insurance (PMI), which protects the lender, not you.

According to the CFPB, PMI typically runs 0.3-1.5% of the loan per year — roughly $30-$125 a month per $100,000 borrowed — until your loan balance falls below 80% of the home's value, at which point it can be cancelled. On a $360,000 loan that's often $130-$250 a month.

FHA loans charge a similar MIP that usually lasts the life of the loan.

Factor PMI into the true monthly cost when weighing a smaller down payment against waiting to save more.

The classic dilemma:

• keep saving to reach 20% and avoid PMI
• buy sooner with a smaller down payment and pay PMI for a while

There's no universal answer.

Buying sooner means starting to build equity and locking in today's price, but you'll pay PMI and likely a slightly higher rate until you hit 20% equity. Waiting avoids PMI but risks rising prices and rates eroding the savings.

In appreciating markets, buying sooner with PMI often wins; in flat markets, saving the full 20% can be cheaper. Model both with the calculator before deciding.

Concrete numbers help:

• On a $300,000 home: 20% is $60,000, 10% is $30,000, 5% is $15,000, and 3.5% FHA is $10,500
• On a $400,000 home those become $80,000, $40,000, $20,000, and $14,000
• On a $500,000 home: $100,000, $50,000, $25,000, and $17,500

VA and USDA buyers can put $0 down at any price.

Remember to add closing costs of 2-5% on top — another $6,000-$25,000 depending on price — so your total cash-to-close is always more than the down payment alone.

You may not need to save the entire down payment yourself.

Most US states run housing finance agency (HFA) programs offering $5,000-$25,000 in grants or low-interest second loans to first-time and moderate-income buyers.

Employer assistance, municipal programs, and FHA-approved gift funds from family (documented with a simple gift letter) can all cover part or all of the down payment on conventional and FHA loans.

Eligibility usually hinges on:

• income limits
• buyer education courses
• purchase-price caps

Check your state HFA and local programs early — assistance can shave years off your savings timeline.

Because a down payment is needed within a few years, keep it safe and liquid, not invested in stocks where a downturn could hit right before you buy.

A high-yield savings account (4-5% APY in 2026), money market account, or short-term certificates of deposit (CDs) are the standard homes for down payment cash.

On an $80,000 goal, the difference between a 0.5% checking account and a 4.5% high-yield account is thousands of dollars over a few years of saving.

Automate transfers on payday so the money is set aside before you're tempted to spend it.

The down payment isn't the only cash you need at closing.

Closing costs — loan origination, appraisal, title insurance, escrow, prepaid taxes and insurance — typically add 2-5% of the home price. On a $400,000 home that's another $8,000-$20,000 on top of the down payment.

Many first-time buyers focus only on the down payment and get blindsided by cash-to-close.

Budget for both, and explore ways to reduce the burden:

• seller concessions
• lender credits in exchange for a slightly higher rate
• rolling some costs into the loan where the program allows

Your down payment ripples through the entire loan.

A larger down payment means:

• a smaller loan
• a lower monthly payment
• less total interest
• more starting equity — and at 20% it eliminates PMI and often earns a better rate

A smaller down payment preserves cash and emergency reserves but raises the payment, adds PMI, and increases lifetime interest.

The right size balances getting into a home against keeping a safety cushion versus the long-run cost of a bigger loan.

Don't drain your emergency fund to reach 20%; a 10-15% down payment with reserves intact is often the wiser choice.