Down Payment Calculator
Calculate how much you need to save for a home down payment, estimate PMI costs, and see a savings timeline to reach your goal.
Understanding Down Payments
A down payment is the upfront cash you pay when purchasing a home, expressed as a percentage of the purchase price. It directly reduces the amount you need to borrow, which in turn lowers your monthly mortgage payment and the total interest you pay over the life of the loan. The size of your down payment is one of the most important financial decisions in the home-buying process.
The 20% Benchmark and PMI
Putting down 20% has long been considered the gold standard because it allows you to avoid Private Mortgage Insurance (PMI). PMI is an additional monthly cost — typically 0.5% to 1% of the loan amount per year — that protects the lender against default. On a $400,000 home with 10% down, PMI could add $150 to $300 per month to your payment. Once you build 20% equity through payments and appreciation, you can request PMI removal, but those early-year costs add up significantly.
Lower Down Payment Options
While 20% is ideal, it's not always practical — especially for first-time buyers in expensive markets. Conventional loans allow as little as 3% down, FHA loans require 3.5%, and VA and USDA loans offer zero-down options for eligible borrowers. Each comes with tradeoffs: FHA loans carry mortgage insurance for the life of the loan, and lower down payments mean higher monthly costs and more interest paid overall. Weigh the cost of waiting to save more against rising home prices in your market.
Strategies for Saving Your Down Payment
Building a down payment fund requires discipline and a plan. Start by setting a specific target amount and timeline using this calculator. Automate monthly transfers to a dedicated high-yield savings account so the money grows while you save. Look for ways to accelerate: direct tax refunds and work bonuses to your fund, reduce discretionary spending temporarily, or explore side income. Some buyers also tap into first-time buyer programs, employer homebuying benefits, or family gifts to close the gap faster. The key is consistency — even modest monthly contributions compound into meaningful progress over time.
Frequently Asked Questions
How much should I put down on a house?
The traditional recommendation is 20% to avoid Private Mortgage Insurance (PMI). However, many loan programs allow 3-5% down (conventional), 3.5% (FHA), or even 0% (VA and USDA). A larger down payment means lower monthly payments and less interest over the life of the loan, but it's a tradeoff with how long you'll need to save.
What is PMI and how much does it cost?
Private Mortgage Insurance (PMI) protects the lender if you default on your loan. It's required when your down payment is less than 20% on a conventional mortgage. PMI typically costs 0.5% to 1% of the loan amount per year, added to your monthly payment. Once you reach 20% equity, you can request to have PMI removed.
Can I use gift money for a down payment?
Yes, most loan programs allow gift funds from family members for part or all of the down payment. You'll need a gift letter stating the money is a gift and not a loan. FHA loans allow 100% of the down payment to be gifted, while conventional loans may require you to contribute a portion yourself depending on the down payment percentage.
Are there down payment assistance programs?
Many states, counties, and cities offer down payment assistance (DPA) programs for first-time homebuyers, often as grants or forgivable loans. FHA loans require just 3.5% down, and VA loans offer 0% down for eligible veterans. Check with your state housing finance agency or HUD-approved housing counselors for programs in your area.