Financial · Live
Down Payment Calculator,
from savings goal to move-in date.
Set a target home price, choose your down payment percentage, and see exactly how long your savings plan will take, plus PMI cost, monthly payment impact, and a full comparison of the 3.5% to 20% down payment tiers.
Inputs
Your home & savings
= $80,000
Savings plan
- Down payment
- $80,000
- Loan amount
- $320,000
- Gap to goal
- $50,000
- Monthly P&I
- $2,128.97
Down payment goal
20% · $400,000 home
Loan amount $320,000 · LTV 80%
37.5% saved · $50,000 remaining
Savings timeline
At $0 $1,500/mo you reach your goal in 2 yrs 6 mo.
You need $50,000 more. With your monthly savings plus a 4.5% annual return, you’ll be ready around November 2028.
Target date
2yr
2028
Savings projection
Balance growth to your down payment goal
Down payment tiers
Compare 3.5% to 20% — cost, PMI, and savings timeline
| Down % | Down ($) | P&I / mo | PMI / mo | Total PMI | Months to save |
|---|---|---|---|---|---|
3.5%FHA min | $14,000 | $2,568 | $257 | $38,085 | Ready |
5% | $20,000 | $2,528 | $253 | $35,973 | Ready |
10% | $40,000 | $2,395 | $240 | $27,600 | 7mo |
15% | $60,000 | $2,262 | $227 | $18,134 | 1yr 7mo |
20%No PMI | $80,000 | $2,129 | — | — | 2yr 6mo |
Home-buying guide
How much do you really need for a down payment?
The down payment is the single biggest barrier most first-time home buyers face. It is the portion of the purchase price you pay in cash at closing; the rest is financed through a mortgage. How large that cash contribution needs to be determines your loan type, your monthly payment, whether you’ll owe Private Mortgage Insurance (PMI), and ultimately how long you’ll need to save.
The popular belief that you need 20% down is a myth for most buyers. Government-backed programs allow as little as 3.5% (FHA), 3% (Fannie Mae HomeReady), or even 0% (VA and USDA). The real question is not what the minimum is — it’s what the optimal amount is given your savings, monthly cash flow, PMI costs, and how quickly you want to get into a home.
Down payment options at a glance
| Down % | Loan type | PMI? | Notes |
|---|---|---|---|
| 0% | VA / USDA | No | Military / eligible rural buyers only |
| 3% | Conventional (HomeReady) | Yes | Income limits; must complete homebuyer education |
| 3.5% | FHA | Yes | FICO ≥ 580; mortgage insurance for life of loan |
| 5% | Conventional | Yes | FICO ≥ 620; PMI until 20% equity |
| 10% | Conventional | Yes | Better rate, lower PMI; 50% less PMI time |
| 20% | Conventional | No | No PMI; best rates; largest upfront cost |
| 25%+ | Conventional / Jumbo | No | Extra pricing improvements; jumbo-friendly |
Private Mortgage Insurance (PMI). The real cost of going below 20%
PMI is an insurance premium that protects the lender (not you) if you default on the loan. It is required on conventional loans with less than 20% down and FHA loans regardless of down payment. The typical annual cost is 0.5% to 1.5% of the original loan amount, depending on your credit score, loan-to-value ratio, and lender.
On a $320,000 loan at 0.8% PMI, you pay roughly $213 per month on top of your regular mortgage payment. That adds up to over $5,500 in the first few years — money that builds no equity and disappears once PMI is cancelled.
Under the Homeowners Protection Act of 1998, PMI automatically terminates once your balance reaches 78% of the original purchase price (based on your original amortization schedule). You can also request cancellation when you reach 80% equity, either through payments or through a new appraisal showing increased home value. FHA loans originated after June 2013 with less than 10% down require MIP for the life of the loan, regardless of equity — a significant drawback of FHA vs. conventional financing.
How the savings timeline is calculated
This calculator models your savings balance as a monthly compound account:
where rmonthly = (1 + annual_return/100)^(1/12) − 1. The savings return input accounts for a high-yield savings account (HYSA), money market account, or conservative short-term investment vehicle. For a 5-year timeline, even a modest 4.5% HYSA compounds meaningfully: $1,500/mo at 4.5% for 48 months yields ~$80,200 versus $72,000 with zero return , an extra $8,200 from interest alone.
20% down: is it still worth it in today’s market?
The 20% conventional wisdom originated when home prices were lower, rates were higher, and PMI was more expensive. Today the analysis is more nuanced:
- In favour of 20%: No PMI (saves $100–$300/mo), better interest rate tier, lower monthly payment, more equity cushion against price corrections, and you avoid the risk of being underwater if prices soften.
- Against waiting for 20%: Every year of waiting is a year of rent payments rather than equity building. If home prices appreciate 5% while you save, a $400,000 home becomes $420,000. Your 20% target just grew by $4,000. In markets with strong appreciation, delaying can cost more than PMI.
- The break-even question: Compare the monthly PMI cost against the monthly rent you would otherwise pay. If PMI is $200/mo and your rent is $1,800/mo, buying with 5% down and paying PMI saves $1,600/mo that goes toward principal and opportunity cost, usually a compelling argument to buy sooner.
Strategies to save for a down payment faster
- Automate and isolate. Open a dedicated HYSA or money market account labelled "home fund." Automate transfers the day after payday so the money is never available to spend.
- Capture windfalls. Tax refunds, bonuses, and inheritance are one-time opportunities to make large lump-sum deposits. A single $10,000 refund deposited today at 4.5% grows to ~$12,300 in five years with no additional contributions.
- Down payment assistance programs. Many states, counties, and cities offer DPA grants or second mortgages of $5,000–$25,000 for first-time buyers or income-eligible borrowers. Fannie Mae’s HomeReady and Freddie Mac’s Home Possible programs also allow 100% of the down payment to come from gift funds.
- IRA first-home exception. First-time buyers can withdraw up to $10,000 from a Traditional IRA without the 10% early withdrawal penalty (income tax still applies). Roth IRA contributions, not earnings, can be withdrawn at any time tax- and penalty-free.
- Invest if your timeline is 5+ years. For timelines over five years, a diversified low-cost index fund portfolio has historically outperformed HYSA returns significantly. The risk of short-term volatility is offset by the longer horizon.
Down payment vs. closing costs — don’t forget the extras
The down payment is not the only cash you need at closing. Closing costs typically add another 2%–5% of the loan amount, covering appraisal, title insurance, origination fees, and prepaid items (property taxes, homeowner insurance, prepaid interest). On a $320,000 loan, closing costs can range from $6,400 to $16,000 — a significant additional cash requirement that many first-time buyers underestimate.
When setting your savings goal, add your expected closing costs on top of the down payment target shown in this calculator. A common rule of thumb is to budget an extra 3% of the home price (or the loan amount) for closing costs.
Worked example
Target home price: $400,000. Desired down payment: 20% = $80,000. Current savings: $30,000. Monthly contribution: $1,500. HYSA return: 4.5%.
- Gap: $80,000 − $30,000 = $50,000
- Monthly rate: (1.045)^(1/12) − 1 ≈ 0.3675%
- Solve: balance ≥ $80,000 → approximately 29 months
- At 7.0% / 30yr on $320,000 loan: P&I ≈ $2,129/mo
- No PMI (20% down) → total P&I savings over 7 years vs. 5% down + PMI ≈ $8,000+
Disclaimer
This calculator is for educational and planning purposes only. Actual down payment requirements, PMI rates, loan programs, and savings account returns vary by lender, credit profile, location, and market conditions. Consult a licensed mortgage professional and financial advisor before making home-purchase decisions.