Down Payment Calculator
Find out how much cash you need up front, what your down payment means for mortgage insurance, and how long your savings plan will take.
Your details
What your down payment changes
The down payment is the part of the purchase price you pay yourself rather than borrowing. It matters for three separate reasons, and only the first is obvious. It reduces the amount you borrow, which reduces both the monthly payment and the total interest. It demonstrates to a lender that you have something at stake. And it determines whether you pay mortgage insurance.
That last point is where the real money is. On a conventional loan, putting down less than 20 percent normally means private mortgage insurance, or PMI, which typically costs between 0.5 and 1.5 percent of the loan amount per year. On a 280,000 dollar mortgage that is somewhere between 1,400 and 4,200 dollars a year, or roughly 117 to 350 dollars a month, and not one cent of it reduces your balance. It exists purely to protect the lender if you default.
The 20 percent threshold is not a legal requirement, and plenty of buyers put down far less. Government-backed FHA loans allow as little as 3.5 percent, and some conventional programs allow 3 percent for first-time buyers. The trade-off is mortgage insurance on top of a larger loan, which is why the effective cost of a small deposit is higher than it first appears.
Do not forget the money you need beyond the deposit. Closing costs usually run between 2 and 5 percent of the purchase price and cover lender fees, title insurance, appraisal, recording and prepaid taxes and insurance. On a 350,000 dollar home that is another 7,000 to 17,500 dollars, payable at the same time. The calculator reports total cash needed so you can plan for the whole bill rather than just the headline deposit.
How the figures are calculated
The deposit is a percentage of the price, the mortgage is the remainder, and the cash requirement adds closing costs on top.
| Symbol | Meaning |
|---|---|
Price |
The purchase price of the home |
d% |
Your down payment as a percentage of the price |
Closing costs |
Fees and prepaid items, estimated as a percentage of price |
Loan |
The mortgage amount, which is what interest is charged on |
Mortgage insurance is charged when the down payment is below 20 percent on a conventional loan. The calculator multiplies the annual PMI rate by the loan amount and divides by twelve to show the monthly cost, and reports the total cash you need including closing costs.
Worked example: 350,000 dollar home
A 350,000 dollar home with 20 percent down at 6.5 percent over 30 years, saving 1,000 dollars a month, with closing costs estimated at 3 percent.
| Figure | Result |
|---|---|
| Home price | $350,000 |
| Down payment (20%) | $70,000.00 |
| Mortgage amount | $280,000.00 |
| Closing costs (3%) | $10,500.00 |
| Total cash needed | $80,500.00 |
| Months to save | 81 months (6 years 9 months) |
| Mortgage insurance | Not required |
| Monthly principal & interest | $1,769.79 |
Reaching 20 percent avoids mortgage insurance entirely. Dropping to 10 percent down would cut the cash needed to 45,500 dollars and the saving time to about 46 months, but the loan would rise to 315,000 dollars, the payment would go up, and mortgage insurance at 0.5 percent a year would add roughly 131 dollars a month that builds no equity at all.
Estimates only. Your lender's figures may differ because of fees, escrow and rounding.
Building a down payment faster
Know which side of 20 percent you are on
If you are close to 20 percent, pushing to reach it is usually worth more than any other single move, because it eliminates a monthly cost that buys you nothing. If you are far below it, a larger deposit mainly reduces your loan rather than removing insurance, so the marginal benefit is smaller.
Look into assistance programs
Many states and cities run first-time buyer programs offering down payment assistance, often as a low-interest second loan or a forgivable grant. These are frequently overlooked. Housing counsellors and state housing finance agencies publish what is available where you live.
Keep the deposit somewhere safe
Money you need within two or three years does not belong in the stock market. A market fall in the months before you buy can remove a large part of your deposit at exactly the wrong moment. High-yield savings or short-term government bonds are the appropriate home for it.
Remember the costs after closing
Moving, furniture, appliance repairs, utility deposits and the first maintenance surprise all land in the first few months. Arriving at closing with nothing left in reserve turns a manageable purchase into a fragile one.
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Frequently asked questions
How much down payment do I need?
Conventional loans commonly start at 3 to 5 percent down for qualified buyers, FHA loans at 3.5 percent, and VA loans can require nothing down for eligible veterans. Twenty percent is the threshold at which conventional mortgage insurance generally stops being required, which is why it is the figure most buyers aim for.
What is PMI and when does it go away?
Private mortgage insurance protects the lender if you default, and it is normally charged on conventional loans when the deposit is under 20 percent. It must generally be cancelled once you reach 20 percent equity based on the original value, and automatically at 22 percent, though you usually have to request it.
Can I use gift money for a down payment?
Usually yes, but the lender will want documentation. Expect to provide a gift letter confirming the money is a gift rather than a loan, plus evidence of where it came from. Rules differ by loan program, so confirm with your lender early rather than at the last minute.
Is a bigger down payment always better?
Not automatically. It reduces your loan and may remove mortgage insurance, but it also consumes cash you might need for emergencies or for higher-return uses. The strongest position is usually a deposit large enough to avoid mortgage insurance while keeping several months of expenses in reserve.
How long will it take to save a down payment?
This calculator divides your total cash requirement by your monthly saving amount, so enter what you realistically put aside each month rather than an aspirational figure. Keep the deposit in an accessible savings account, since the timeline is usually a few years rather than decades.