Down Payment Calculator
See your down payment amount, loan size, PMI, closing costs, and how long to save. Results update instantly.
Last reviewed: May 2026This down payment calculator turns your target home price, current savings, and monthly savings rate into a clear timeline: how much cash you need at closing, how long it will take to get there, and whether Private Mortgage Insurance (PMI) will apply along the way. Enter your numbers above; the sections below explain the math, the loan-program tradeoffs, and the practical edge cases — PMI removal mechanics, gift-fund documentation, FHA versus conventional, jumbo and government-backed alternatives — that decide what your real cash-to-close figure looks like.
What This Calculator Does
The Three Numbers That Drive Everything
Every down payment plan reduces to three inputs: your target home price, your current savings balance, and your monthly savings rate. From those three numbers and a chosen down-payment percentage, this calculator derives five outputs that matter at closing — the down payment dollar amount, the resulting loan size, an estimated PMI premium (if applicable), closing costs, and the months remaining until you hit your full cash-to-close target. Each output updates instantly as you adjust any input, so you can stress-test scenarios without reloading: what if rates jump to 7.5%, what if you can only save $1,000/month, what if you target 10% down instead of 20%?
The PMI Threshold Math
The single most important number in down payment planning is the 20% threshold. Putting down less than 20% on a conventional loan triggers Private Mortgage Insurance — an annual premium that runs 0.20%–1.50% of the loan balance per year, billed monthly alongside your principal-and-interest payment. The calculator estimates PMI at roughly 0.70% of the loan amount annually, with sensible floor and ceiling caps reflecting typical lender pricing. When your slider crosses 20%, the PMI estimate flips to "None" and the warning banner clears. This visualization makes the cost of the PMI threshold tangible: see exactly how much more you need to save to escape that monthly premium.
How the Savings Timeline Is Computed
The timeline formula is straightforward: remaining cash needed (down payment + closing costs − current savings) divided by your monthly savings rate, rounded up to the next whole month. It does not include interest earned on your savings — for short timelines under three years, that omission is typically less than 2% of the total. The Worked Example below shows how a high-yield savings account changes the math at longer horizons. If your current savings already exceed the cash-to-close figure, the timeline displays "Already there!" — your job is no longer saving but choosing the right loan structure and timing.
Down Payment Percentage Comparison
The slider spans 3.5% to 30%, covering every realistic down payment scenario: FHA minimum (3.5%), Conventional 97 (3%), standard conventional (5%), the common 10% tier, the 15% halfway point, and 20% (PMI-free), plus higher percentages for buyers who want to minimize interest paid. As you move the slider, watch the loan amount fall, the PMI charge disappear at 20%, and the total cash needed climb. This is the single most important decision in down payment planning, and the calculator makes the trade-offs immediately legible.
How to Use It
Step 1 — Enter Your Target Home Price
Be realistic. Pull live listings in your target neighborhood, sort by your maximum, and use the median asking price of homes that genuinely fit your needs — not the bottom of the range. The calculator defaults to $350,000, near the U.S. median sale price as of late 2025; replace it with the actual figure for your market. If you are not sure what you can afford, complete this calculation first with a wide range of home prices, then cross-check the resulting monthly P&I payment against the 28/36 rule (housing under 28% of gross monthly income, total debt under 36%).
Step 2 — Choose Your Down Payment Percentage
Start at 20% to see the PMI-free benchmark. Then move the slider to your realistic target — most first-time buyers land between 5% and 12%. Watch the PMI estimate appear and the total cash-needed line shift downward as you go below 20%. The "right" percentage depends on your timeline, your comfort with PMI, and whether you have other higher-yield uses for the cash you'd otherwise sink into equity.
Step 3 — Set Interest Rate and Term
Use the current 30-year fixed rate for your credit profile — Freddie Mac's weekly Primary Mortgage Market Survey at freddiemac.com/pmms is a credible reference. For a fast estimate, add 0.25%–0.50% to the headline rate to reflect typical lender margin for non-prime credit. Loan term defaults to 30 years; 15-year loans cut total interest dramatically but raise monthly payments roughly 50%, which is a meaningful budget impact that often shifts the down-payment decision.
Step 4 — Enter Savings and Monthly Contribution
Current savings is everything earmarked for the house — checking, HYSA, brokerage cash, money-market balances. Do not include retirement accounts unless you have a specific plan to use them (and have read the IRS 401(k)/IRA first-time homebuyer rules). Monthly savings should reflect your actual sustainable rate, not an aspirational target. The savings timeline tells you the truth about your plan.
Worked Example: $450K Target, 20% Down, $1,500/Month Savings
- Target home price
- $450,000
- Down payment percentage
- 20% (PMI-free conventional)
- Down payment amount
- $90,000
- Closing costs (3%)
- $13,500
- Total cash needed
- $103,500
- Current savings
- $32,000
- Monthly savings rate
- $1,500
- Savings vehicle
- High-yield savings at 4.5% APY
Step 1 — Compute Cash Gap
Total cash needed minus current savings: $103,500 − $32,000 = $71,500 still required. Note that closing costs (3%) sit on top of the down payment itself — buyers who skip this line item routinely arrive at closing $13,000–$22,000 short.
Step 2 — Naive Linear Timeline (No Interest)
$71,500 ÷ $1,500/month = 47.67 months, rounded up to 48 months — exactly four years. This is what the calculator above displays by default. It is conservative because it ignores compounded interest on the growing balance.
Step 3 — Timeline With 4.5% APY HYSA Interest
Solving for n where the future value of a $32,000 starting balance plus $1,500/month deposits at 4.5% APY (0.00375 monthly) reaches $103,500: the closed-form formula is FV = P₀(1+r)n + PMT × [((1+r)n − 1) ÷ r]. Iterating, the balance crosses $103,500 between months 40 and 41 — roughly 3 years 5 months. That's a seven-month acceleration versus the no-interest baseline, worth approximately $10,500 in saved time relative to home price appreciation.
Step 4 — What Happens If the Goal Shifts to 10% Down
10% down = $45,000 down payment + $13,500 closing = $58,500 total cash. Subtracting current $32,000 leaves $26,500 to save. At $1,500/month: 18 months linearly, or ~17 months with HYSA interest. Trade-off: a $405,000 loan instead of $360,000 — and roughly $210/month in PMI until the balance falls below 80% of the original appraised value ($360,000 on this $450,000 home). That PMI ends up costing approximately $30,000 across the years it stays on, before the borrower hits 80% LTV through amortization alone (around year 9–10). The decision: accept ~$30,000 in PMI to buy 30 months sooner, versus wait 30 months for 6%–12% home-price appreciation potentially erasing the savings gap entirely.
Compound interest at 4.5% APY accelerates the timeline by approximately 8–9 months versus a 0% interest baseline. The gap widens at longer horizons.
Common Use Cases
First-Time Buyer Planning
The default scenario the calculator was built for: you have not bought before, you're choosing between FHA 3.5%, Conventional 97 (3%), Conventional 5%, or stretching for 20%. Run the calculator with each percentage to see how the cash-to-close, PMI, and savings timeline shift. First-time buyer programs through HUD-approved state Housing Finance Agencies can layer Down Payment Assistance grants on top of any of these — typically $5,000–$25,000 in deferred-payment or forgivable second liens, available to buyers under area-median-income limits.
Jumbo Loan Minimum Down Planning
Loans above the Fannie Mae/Freddie Mac conforming limit (currently $766,550 for most counties, higher in designated high-cost areas) become jumbo loans, which carry stricter down-payment requirements. Most jumbo lenders want a minimum of 10%–20% down with credit scores of 700+. For a $1.2M home, 20% down is $240,000 — substantially larger than conforming loan thresholds. Use the calculator with your target jumbo home price and a 20% down assumption to see the realistic timeline; many jumbo buyers find their cash-to-close requirement is the binding constraint, not their qualifying income.
ARM-vs-Fixed Cost Comparison
An adjustable-rate mortgage often carries a lower initial rate than a 30-year fixed, which makes the monthly payment more affordable and lets you qualify for a higher loan amount — meaning you can buy with the same down payment at a higher home price. Use the calculator with both rate scenarios (your fixed-rate quote and the lower ARM teaser rate) to see how the monthly P&I difference compares to your down-payment plan. Note: ARM resets after the initial fixed period can push the payment $200–$600 higher; stress-test your budget against the lifetime cap before choosing.
Gift-Funds Documentation
If parents, grandparents, or a fiancé are contributing to the down payment, model the scenario with their contribution included in "current savings" — but be aware that lenders require strict documentation of the gift. Conventional and FHA both allow 100% gift funds for primary residences with no minimum borrower contribution (above 20% down on conventional). The gift letter, donor bank statements, and your deposit receipt all need to be in place before underwriting. Plan the deposit at least 60 days before applying — large unsourced deposits within the underwriting window will be flagged.
FHA 3.5% vs Conventional 20% Tradeoffs
FHA's 3.5% minimum looks attractive, but the lifetime annual MIP at 0.55%–0.85% (for loans with under 10% down) makes it expensive over a long hold. A 20% conventional buyer pays zero MIP/PMI for the entire loan. On a $450,000 home, the FHA buyer needs only $15,750 down versus the conventional 20% buyer's $90,000 — a meaningful $74,250 cash difference — but pays roughly $180–$280/month in MIP indefinitely. Over a 10-year hold that's $21,600–$33,600 in MIP. The right call depends on alternative uses for the $74,250 cash and how long you plan to stay.
Edge Cases and Special Programs
PMI Removal: 80% LTV (Request) vs 78% LTV (Automatic)
The Homeowners Protection Act of 1998 (HPA) sets two distinct PMI cancellation triggers on conventional loans. Borrower-requested cancellation: once your loan balance reaches 80% of the original appraised value, you can submit a written request and the servicer must cancel PMI, provided you're current on payments and have no second liens. Automatic termination: at 78% LTV based on original value, your servicer is required to cancel PMI without any action from you. If your home has appreciated significantly, you can also request a new appraisal-based cancellation typically after two years of payments — this path uses current value rather than original value and can accelerate PMI removal by years.
Down-Payment Gift Documentation Rules
Conventional loans: gift funds are unrestricted for the entire down payment on primary residences if you put down 20% or more; for under 20%, Fannie Mae's HomeReady and standard conventional both allow 100% gift funds with a documented gift letter. FHA: 100% gift funds allowed from family members, employers, government agencies, or qualifying charitable organizations. VA and USDA: 100% gift funds allowed from approved donors. Required documents: signed gift letter with donor identification and relationship, donor's bank statement showing the funds existed before transfer, copy of the cancelled check or wire receipt, and your bank statement showing receipt. Crypto gifts must be converted to U.S. dollars and seasoned in a bank account for 60 days before applying.
FHA Upfront MIP + Annual MIP vs Conventional PMI
FHA's two-part insurance structure: 1.75% upfront MIP charged at closing (typically financed into the loan balance, raising your starting principal), plus annual MIP of 0.55%–0.85% depending on loan term and LTV. For loans with under 10% down, annual MIP continues for the life of the loan per HUD Handbook 4000.1 — you cannot cancel it. Conventional PMI: no upfront charge, monthly premium of 0.20%–1.50% of loan balance, cancellable at 80% LTV (request) or 78% (automatic). Over a 30-year hold, FHA's lifetime MIP typically costs $25,000–$50,000 more than conventional PMI that ends at year 9–10.
Jumbo Loan Requirements: 10%–20% Down
Loans above the conforming limit ($766,550 in most counties for 2025, up to $1,149,825 in high-cost areas) are jumbo loans, underwritten outside Fannie/Freddie guidelines. Typical jumbo down payment minimums: 10% with strong credit (720+) and significant reserves (6–12 months PITI), 15% with average credit (680–720), 20% for borderline profiles. Some portfolio lenders offer 10% jumbos with Lender-Paid PMI baked into a higher rate. Required reserves are substantially higher than conforming — expect 12 months of PITI in liquid assets after closing.
VA Loans: 0% Down Possible
Eligible active-duty service members, veterans with qualifying service, National Guard and Reserve members, and surviving spouses can obtain VA loans with zero down payment, no PMI, and competitive rates. The trade-off is a one-time VA funding fee of 1.25%–3.3% of the loan amount (depending on down payment, prior VA use, and service category), which can be financed into the balance or paid at closing. Disabled veterans with service-connected disabilities may be exempt from the funding fee. VA loans are assumable and carry no maximum loan limit for qualified buyers above conforming limits.
USDA Rural Development: 0% Down
USDA Section 502 Guaranteed loans for moderate-income buyers in USDA-designated rural and suburban areas require no down payment. Income limits apply — generally up to 115% of area median income. The "rural" designation is broader than most buyers expect; many small towns and outer suburbs qualify. Check the eligibility map at eligibility.sc.egov.usda.gov. USDA charges a 1% upfront guarantee fee and a 0.35% annual fee, both substantially lower than FHA MIP.
Down-Payment Assistance Programs
State Housing Finance Agencies (HFAs) and many city and county programs offer Down Payment Assistance: grants, deferred-payment second liens, or forgivable loans that cover all or part of the down payment for first-time buyers under income limits. Amounts range from $5,000 to $25,000+ depending on jurisdiction. HUD maintains a state-by-state directory at hud.gov/states. DPA programs can layer with FHA, Conventional 97, and VA loans. Some programs require homebuyer education courses (typically 8 hours, often delivered online); start the education early since it must be completed before closing.
Behind the Scenes: Why 20% Became the Magic Number
The 1934 FHA and the Birth of the Modern Mortgage
Before the Federal Housing Administration was created by the National Housing Act of 1934, mortgages were typically 5–10 year balloon loans with 50% down payments. The Depression-era foreclosure crisis exposed how brittle that structure was: when borrowers couldn't refinance the balloon at the end of the term, they lost their homes. The FHA standardized two innovations that defined American homeownership ever after: long-amortization fixed-rate loans (initially 20 years, later 30) and lower down-payment requirements (initially 20%) protected by federal mortgage insurance. The "20% down" benchmark was set by the 1934 statute as the LTV threshold below which FHA insurance was required — and that threshold migrated to private conventional lending as the default PMI trigger when private mortgage insurers entered the market in the 1950s.
Why PMI Exists (and Who It Protects)
PMI is insurance the lender purchases against your default, with the premium passed through to you. It does not reduce your obligation if you default — it just guarantees the lender will be made whole on the difference between sale proceeds and outstanding balance up to typically 25%–35% of the loan. The 20% LTV threshold reflects an empirical observation: historically, loans with 20%+ borrower equity have foreclosure loss rates low enough that lenders consider the additional insurance unnecessary. Loans below 80% LTV have meaningfully higher loss rates, justifying the additional protection (paid by you).
Jumbo Loans and the Conforming Limit
Fannie Mae and Freddie Mac, the government-sponsored enterprises that buy conforming loans on the secondary market, set annual loan-size limits adjusted for home-price inflation. The 2025 baseline is $766,550 for most U.S. counties; high-cost areas (parts of California, New York, Hawaii) go up to $1,149,825. Loans above these limits are jumbo loans, underwritten outside the GSE framework with stricter requirements. The conforming limit is the dividing line that determines whether 3%–5% down loans are even available — below the limit, yes; above it, you're almost always at 10%+ minimum down.
Savings Vehicle Comparison: HYSA, MMF, CDs, T-Bills
For a down payment fund with a 1–5 year horizon, the four mainstream low-risk options each have a use case. High-Yield Savings Accounts (HYSAs) at online banks (Ally, Marcus, SoFi, Discover) yielded 4.0%–4.5% APY through 2025, are fully FDIC-insured up to $250,000, and offer same-day liquidity — best for funds you might need in under 18 months. Money Market Funds (MMFs) like VMFXX (Vanguard Federal Money Market) yielded similar rates but are SEC-regulated securities, not FDIC-insured; SIPC coverage applies but principal isn't guaranteed (in practice, prime MMFs broke the buck only twice in history). Certificate of Deposit (CD) ladders with rungs at 3, 6, 12 months let you lock yields while maintaining periodic access — useful when rates are falling. Treasury Bills (T-bills) bought via TreasuryDirect carry the full faith and credit of the U.S. government, are exempt from state and local income tax (meaningful in California, New York, Oregon), and yielded competitive rates with HYSAs in 2025. For longer horizons (3+ years), a T-bill ladder typically wins on after-tax yield for residents of high-state-tax jurisdictions.
YMYL Disclaimer and Where to Get Personalized Help
Interest rates change daily. FHA, VA, USDA, and conventional underwriting guidelines change periodically. Down Payment Assistance programs open and close throughout the year as state allocations are exhausted and replenished. The figures in the worked examples above reflect conditions as of the May 2026 review date and should not be treated as current quotes — pull live rates from Freddie Mac's Primary Mortgage Market Survey (freddiemac.com/pmms) and consult a licensed mortgage loan officer for a personalized rate sheet.
For free, personalized down-payment and homebuying advice, the two best resources are HUD-certified housing counselors (hud.gov/findacounselor — directory of 1,800+ certified agencies offering free or low-cost counseling) and National Foundation for Credit Counseling (NFCC) member agencies (nfcc.org — same model, sliding-scale fees up to free for low-income clients). Both can run the math with your actual numbers, evaluate DPA program eligibility, and flag credit issues that need addressing before applying. Use them before you commit to a specific loan structure.
Limitations of This Calculator
This calculator estimates four headline figures: down payment dollar amount, loan size, PMI premium (where applicable), and savings timeline. It does not currently model: compounded interest growth on your savings (handled in the worked example narrative), property tax and homeowners insurance escrow added to the monthly payment, prepaid interest at closing, lender origination fees that vary by lender, county-specific transfer taxes, HOA capital contributions on condos, or Down Payment Assistance grant amounts. For a complete monthly payment estimate including taxes, insurance, and PMI, pair this calculator with the Mortgage Calculator. For affordability backed out from your income and debt profile, use the Home Affordability Calculator. For renter-versus-buyer net-present-value comparisons, see the Rent vs Buy Calculator.
Frequently Asked Questions
How much do I really need for a down payment?
The honest answer depends on the loan program. Conventional conforming loans go as low as 3% down for first-time buyers under Fannie Mae's HomeReady and Freddie Mac's Home Possible programs; standard conventional is 5%; FHA requires 3.5% with a credit score of 580+. To eliminate PMI entirely on a conventional loan you need 20% down. On a $450,000 target home, that scale runs from $13,500 (3%) to $90,000 (20%). Most first-time buyers in 2025 closed with a median 8% down per the National Association of Realtors' Profile of Home Buyers and Sellers — well under 20%, with PMI baked into the monthly payment. Budget separately for closing costs (2–5% of price) and 1–3 months of reserves; lenders want to see liquidity beyond the down payment itself.
Is 20% down really required to buy a house?
No. 20% is the threshold that eliminates Private Mortgage Insurance on a conventional loan, but every major loan program allows substantially less. Conventional 97 loans accept 3% down. FHA accepts 3.5% with a 580 credit score (10% with 500–579). VA loans for eligible service members and veterans allow 0% down. USDA loans for qualifying rural and suburban properties also allow 0% down. State and local Down Payment Assistance (DPA) programs through HUD's Housing Finance Agencies can layer grants or second-lien forgivable loans on top of any of these. The trade-off below 20% is PMI/MIP, which adds $50–$300 to your monthly payment depending on loan size and credit profile. The math sometimes favors buying sooner with PMI than waiting years to hit 20% — model both scenarios before deciding.
What is PMI and how do I avoid it?
Private Mortgage Insurance protects the lender — not you — if you default on a conventional loan with less than 20% equity. Annual PMI rates run 0.20%–1.50% of the loan balance, driven primarily by your credit score and loan-to-value ratio. On a $360,000 loan at 0.70% annually, PMI adds $210/month. There are three legitimate paths to avoid or remove it. First, put 20% down at closing so PMI never applies. Second, under the Homeowners Protection Act of 1998 your servicer must automatically cancel PMI once your loan balance reaches 78% LTV based on the original appraised value, and you can formally request cancellation at 80% LTV. Third, pay extra principal aggressively to reach the 80% threshold faster — even modest extra payments early in the loan can shave years off the PMI clock.
How does FHA differ from conventional when it comes to down payments?
FHA is government-insured by HUD and explicitly designed for lower down payments and weaker credit profiles. Minimum is 3.5% down with a 580 FICO; 10% down is required for 500–579. FHA carries two insurance charges: an upfront Mortgage Insurance Premium of 1.75% of the loan amount (usually financed into the balance) and an annual MIP of 0.55%–0.85% depending on term and LTV. For loans originated with under 10% down, that annual MIP remains for the life of the loan per HUD Handbook 4000.1 — you cannot cancel it. Conventional loans require 3%–5% minimum down for most programs, typical credit minimum of 620, and PMI that you can cancel once you hit 80% LTV. If you have the credit and can reach 10–20% down, conventional is almost always cheaper over a 7+ year hold; FHA wins on flexibility for first-time buyers with limited credit history.
Can I use a gift for my down payment?
Yes — gift funds are explicitly allowed on conventional, FHA, VA, and USDA loans, but the documentation requirements are strict. The gift must come from a documented source (family member, employer, fiancé, domestic partner, government program, or qualifying charitable organization) and cannot be a disguised loan. Lenders require a signed gift letter stating the dollar amount, the donor's relationship to you, the property address, and explicit language confirming repayment is not expected. You'll also need to source the funds: a copy of the donor's bank statement showing the funds in their account, and a bank statement showing the deposit into your account. On conventional loans for primary residences, 100% of the down payment can be gift funds if you put down 20% or more; below 20%, programs vary on whether borrower contribution is required. Document everything — undocumented deposits in your bank statements during the underwriting window will delay or sink closing.
What's a no-down-payment loan and do I qualify?
Two federally backed programs offer true 0% down financing. VA loans, guaranteed by the Department of Veterans Affairs, are available to active-duty service members, veterans, National Guard and Reserve members with qualifying service, and surviving spouses. There's no PMI, no down payment minimum, and competitive rates — but there is a one-time VA funding fee (typically 1.25%–3.3% of the loan) that can be financed. USDA Rural Development loans target moderate-income buyers purchasing in USDA-designated rural and many suburban areas; check the USDA eligibility map at eligibility.sc.egov.usda.gov before assuming a property qualifies. USDA loans require no down payment but charge a 1% upfront guarantee fee and a 0.35% annual fee. Income limits apply — generally up to 115% of area median income. For everyone else, the closest equivalent is a Conventional 97 or FHA 3.5% loan combined with a Down Payment Assistance grant from your state Housing Finance Agency.
Should I keep saving for 20% or buy now with less down?
The framework: compare the all-in cost of waiting (rent paid, opportunity cost on savings, home price appreciation, and any rate movement) against the all-in cost of buying now with PMI (the extra PMI premium until you hit 80% LTV, plus the slightly higher loan principal). In appreciating markets, waiting two extra years to save another $30,000 often costs more than the PMI you'd have paid — by the time you hit your 20% target the home has appreciated 6%–12% and rates may have moved against you. In flat markets with high rents and stable prices, waiting can be worth it. Run both scenarios with conservative assumptions: 3% annual appreciation, your current rent locked, your current savings rate, and PMI of $150–$250/month for the loan size you'd actually take. If buying-now nets out within ~$15,000 of waiting, the convenience and stability of ownership usually tips the decision. For personalized analysis, a HUD-certified housing counselor (free through NFCC and HUD) can run the math with your actual numbers.
Where should I park my down-payment savings?
Match the savings vehicle to your timeline. Under 18 months out: a high-yield savings account (HYSA) at an FDIC-insured online bank — yields fluctuate with the Fed funds rate but ran 4.0%–4.5% APY through 2025, fully liquid, no risk of principal loss. 18–36 months out: a CD ladder (3-month, 6-month, 12-month rungs) or a money market fund — modestly higher yield than HYSA with low risk if you can lock funds for 6–12 month windows. 36 months+: short-term Treasury bills (4-week to 52-week T-bills) bought through TreasuryDirect are state-tax-exempt and currently yield similar to top HYSAs; some buyers also use Series I Savings Bonds for inflation protection, though the 12-month lock-up and $10,000/year cap limit usefulness. Avoid stocks, crypto, or any vehicle with daily price volatility — a 20% drawdown six months before closing can derail the entire purchase. Whatever you choose, the priority is principal preservation, not maximum yield.
Quick reference
| Loan Amount | Down Payment % | Down Payment Amount | Monthly Payment |
|---|---|---|---|
| $300,000 | 5% | $15,000 | $1,200 |
| $250,000 | 10% | $25,000 | $1,100 |
| $400,000 | 20% | $80,000 | $1,500 |
| $350,000 | 0% | $0 | $1,300 |
| $200,000 | 15% | $30,000 | $900 |
| $500,000 | 25% | $125,000 | $1,800 |