Down Payment Calculator
See how much you need to save, how long it will take, and how your down payment percentage affects your estimated monthly mortgage payment and PMI.
Home Purchase
Savings Plan
Mortgage Estimate
† Assumes monthly compounding at the entered APY. Actual returns depend on your account terms and rate changes over time.
* PMI estimated at 0.85% of loan amount per year. Actual PMI varies by credit score, LTV, and lender. Payment estimate excludes taxes and insurance.
* Estimated using 0.85% annual PMI rate and a 30-year term. Closing costs estimated as a percentage of home price. Actual costs vary by lender, credit score, and loan program.
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How the Down Payment Calculator Works #
This calculator helps you plan your down payment in two ways. First, it shows how your down payment percentage affects your estimated monthly mortgage payment and whether you'll need to pay private mortgage insurance (PMI). Second, it projects how long it will take to reach your savings goal based on your current savings, monthly contributions, and savings account interest rate.
The savings timeline uses monthly compounding to estimate how your money grows over time. Each month, your existing balance earns interest at your savings APY divided by 12, then your monthly contribution is added. The calculator tracks how many months it takes for your balance to reach the target down payment amount, along with total interest earned during that period.
The mortgage payment estimates use the standard amortization formula — the same math lenders use — to calculate principal and interest. PMI is estimated at 0.85% of the loan amount per year, which is a common midpoint for conventional loans. Actual PMI rates range from 0.5% to 1.5% depending on your credit score, loan-to-value ratio, and lender.
How Much Down Payment Do You Need? #
The minimum down payment depends on your loan type:
- Conventional loans — As low as 3% for first-time buyers through programs like Fannie Mae's HomeReady or Freddie Mac's Home Possible. Standard conventional loans typically require 5% minimum. Putting down less than 20% triggers PMI, which adds $100–$300 per month to your payment depending on loan size.
- FHA loans — 3.5% minimum with a credit score of 580 or higher. FHA loans require mortgage insurance premiums (MIP) for the life of the loan if your down payment is under 10%, making the long-term cost higher than conventional PMI that can be canceled at 20% equity.
- VA loans — 0% down for eligible veterans and active-duty service members. No mortgage insurance required, though there is a one-time funding fee (1.25%–3.3%) that can be rolled into the loan.
- USDA loans — 0% down for eligible properties in designated rural areas. Income limits apply. A 1% upfront guarantee fee and 0.35% annual fee are required.
While minimum down payments let you buy sooner, the 20% threshold remains important because it eliminates PMI on conventional loans, reduces your loan amount and monthly payment, and often qualifies you for a lower interest rate. On a $400,000 home, a 20% down payment is $80,000 — and the monthly savings from avoiding PMI alone can be $200 or more.
Strategies to Save Faster #
Building a down payment is often the biggest hurdle for homebuyers. Here are proven strategies to reach your goal faster:
- High-yield savings accounts — Online banks and credit unions frequently offer APYs between 3.5% and 4.5%, compared to the national average of 0.46% at traditional banks. On a $70,000 savings goal, a 3.8% APY earns roughly $2,300 more per year than a 0.5% account.
- Automate transfers — Set up automatic transfers to your down payment fund on payday. Treating savings like a bill payment removes the temptation to spend it. Even increasing your monthly transfer by $200 can shave months off your timeline.
- Down payment assistance programs — Many states and municipalities offer grants, forgivable loans, or matched savings programs for first-time buyers. These can cover 3%–5% of the purchase price. Check your state's housing finance agency for options.
- Gift funds — Most loan programs accept gift money from family members. Conventional loans require a gift letter confirming it's not a loan. FHA loans allow 100% of the down payment to come from gift funds.
- Side income — Dedicating freelance, gig, or bonus income entirely to your down payment fund can significantly accelerate your timeline without affecting your regular budget.
Understanding PMI and the 20% Threshold #
Private Mortgage Insurance protects the lender — not you — if you default on a conventional loan with less than 20% down. PMI costs typically range from 0.5% to 1.5% of the loan amount per year, or roughly $133–$400 per month on a $320,000 loan. The exact rate depends on your credit score, loan-to-value ratio, and the type of PMI (borrower-paid vs. lender-paid).
The comparison table above shows the estimated monthly PMI at each down payment level using a 0.85% annual rate — a common midpoint estimate. Your actual PMI may be higher or lower. Borrowers with excellent credit (740+) often see rates around 0.5%, while those with lower scores may pay 1.2% or more.
PMI can be canceled once you reach 20% equity in your home, either through principal payments or home value appreciation. Under the Homeowners Protection Act, your lender must automatically terminate PMI when your loan balance reaches 78% of the original purchase price. You can also request cancellation at 80% (20% equity) with a good payment history.
The key question is whether it's worth waiting to save 20% or buying sooner with a smaller down payment. If home prices are rising faster than you can save, buying earlier with PMI may cost less in the long run — but you'll need to factor in the extra monthly expense and the total PMI paid before reaching 20% equity.
Frequently Asked Questions #
How much down payment do I need to buy a house?
Minimums range from 0% (VA and USDA loans) to 3%–3.5% (conventional and FHA loans). Putting down at least 20% avoids private mortgage insurance (PMI) on conventional loans, which can save $100–$300 per month. On a $400,000 home, a 20% down payment is $80,000.
What is PMI and when does it apply?
Private Mortgage Insurance (PMI) is required on conventional loans when your down payment is below 20%. It protects the lender if you default. PMI typically costs 0.5%–1.5% of the loan amount per year and can be canceled once you reach 20% equity. FHA loans have a similar charge called MIP that operates under different rules.
How long will it take to save for a down payment?
It depends on your target amount, current savings, monthly contribution, and interest earned. Use the calculator above to see a personalized timeline. For example, saving $1,500/month starting from $10,000 at a 3.8% APY would take roughly 43 months to reach $80,000.
Can I use gift money for a down payment?
Yes. Most loan programs accept gift funds from family members with a gift letter confirming it's not a loan. FHA loans allow 100% of the down payment from gifts. Some programs also accept gifts from employers or nonprofits.
Is it better to put 20% down or buy sooner with less?
Putting 20% down avoids PMI and lowers your payment, but waiting means potentially higher home prices and paying rent longer. The best choice depends on your local market, PMI cost vs. appreciation rate, and whether you'll have an adequate emergency fund after closing. Many advisors recommend keeping 3–6 months of expenses in reserves.
What are down payment assistance programs?
State and local governments, nonprofits, and some employers offer programs to help first-time buyers with down payments. These include grants, forgivable loans, deferred-payment loans, and matched savings programs. Eligibility depends on income, location, and buyer status. Check your state's housing finance agency for available options.