Down Payment Calculator
Calculate how much to save for a home down payment and closing costs. See how long it will take to reach your goal.
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Understanding Down Payments
A down payment is the upfront cash you pay when buying a home. It represents your initial equity in the property and affects your loan terms, monthly payment, and whether you need private mortgage insurance.
Most lenders require at least 3-5% down for conventional loans, but putting down 20% or more eliminates the need for PMI and often gets you better interest rates.
What Are Closing Costs?
Closing costs are fees paid at the close of a real estate transaction. They typically range from 2-5% of the home price and include lender fees, title insurance, appraisal, inspections, and prepaid items like property taxes and homeowners insurance.
- Loan origination fees
- Appraisal and inspection fees
- Title search and insurance
- Attorney fees
- Property taxes (prorated)
- Homeowners insurance
- Escrow fees
Private Mortgage Insurance (PMI)
PMI is required when your down payment is less than 20%. It protects the lender if you default on your loan. PMI typically costs 0.5-1% of the loan amount annually and can be removed once you have 20% equity.
Tip: Reaching 20% down payment saves you $100-200+ per month on a typical mortgage by avoiding PMI.
Strategies to Save Faster
Set up automatic transfers to a dedicated savings account
Put any windfalls (bonuses, tax refunds) directly into savings
Reduce expenses temporarily to boost monthly contributions
Consider a high-yield savings account for better returns
Look into first-time homebuyer assistance programs
Explore employer-matched savings programs if available
Down Payment Options by Loan Type
Conventional: 3-20%+ | Best rates at 20%+
FHA: 3.5% minimum | Lower credit requirements
VA: 0% for eligible veterans | No PMI
USDA: 0% for rural areas | Income limits apply
How to Use This Calculator
- 1
Enter the price of the home you're targeting.
- 2
Choose your desired down payment percentage.
- 3
Input how much you've already saved.
- 4
Enter how much you can save each month.
- 5
Adjust the expected return on your savings if applicable.
Savings Examples
First-Time Buyer - 10% Down
Home: $350,000 | Down: 10% ($35,000) | Closing: 3% ($10,500) | Total: $45,500
Saving $1,500/month reaches goal in 30 months
Avoiding PMI - 20% Down
Home: $400,000 | Down: 20% ($80,000) | Closing: 3% ($12,000) | Total: $92,000
Saving $2,000/month reaches goal in 46 months but avoids PMI
Starter Home - 5% Down
Home: $250,000 | Down: 5% ($12,500) | Closing: 3% ($7,500) | Total: $20,000
Saving $1,000/month reaches goal in 20 months
Frequently Asked Questions
How much should I save for a down payment?
Aim for 20% to avoid PMI, but you can buy with as little as 3-5% down for conventional loans or 3.5% for FHA. Consider what monthly payment you can afford when deciding.
What are typical closing costs?
Closing costs typically range from 2-5% of the home price. On a $300,000 home, expect $6,000-$15,000. Some costs are negotiable, and sellers sometimes contribute.
Should I invest my down payment savings?
For short-term goals (under 3 years), keep savings in a high-yield savings account. The risk of market losses outweighs potential gains when you need the money soon.
Can I use gift money for a down payment?
Yes, most loans allow gift funds from family members. You'll need a gift letter stating the money doesn't need to be repaid. Some loans have limits on gift amounts.
What's better: larger down payment or keeping cash reserves?
Balance is key. Don't deplete all savings for a down payment. Keep 3-6 months of expenses as an emergency fund plus reserves for moving and immediate home expenses.
How does down payment affect my mortgage rate?
Larger down payments often qualify for better rates. Lenders see you as lower risk when you have more equity. The difference can be 0.25-0.5% or more on your rate.