Down Payment Calculator
Down Payment Options
Conventional: 3-5%
Standard loans with PMI required below 20%.
FHA: 3.5%
Government-backed loans for first-time buyers.
VA: 0%
For eligible veterans and service members.
Ideal: 20%+
Avoids PMI and gets better rates.
Typical Down Payments
Related Calculators
Understanding Down Payments
What Is a Down Payment?
A down payment is the initial upfront payment you make when purchasing a home. It represents your equity stake in the property and reduces the amount you need to borrow. The larger your down payment, the smaller your loan and monthly payments will be.
Down Payment Formula
Why 20% Is Often Recommended
Avoid PMI
With 20% down, you avoid Private Mortgage Insurance (PMI), which typically costs 0.5-1% of the loan amount annually.
Better Interest Rates
Larger down payments often qualify you for better interest rates, saving thousands over the life of the loan.
Lower Monthly Payments
A smaller loan means smaller monthly payments, giving you more budget flexibility.
Instant Equity
You start with significant equity, providing a buffer against market downturns.
Low Down Payment Options
| Loan Type | Min. Down | Requirements |
|---|---|---|
| Conventional | 3% | Good credit (620+), PMI required below 20% |
| FHA | 3.5% | Credit 580+, MIP required for life of loan |
| VA | 0% | Veterans/military only, funding fee applies |
| USDA | 0% | Rural areas, income limits apply |
Understanding PMI
Private Mortgage Insurance (PMI) protects the lender if you default on your loan. It's required on conventional loans when your down payment is less than 20%. PMI typically costs between 0.5% and 1% of the loan amount annually.
PMI Example
Closing Costs to Budget For
Typical Costs (2-5% of price)
- Loan origination fees
- Appraisal fee ($300-500)
- Title insurance
- Escrow fees
- Property taxes (prorated)
Prepaid Items
- Homeowners insurance (1 year)
- Property tax escrow
- Prepaid interest
- HOA fees (if applicable)
- Home inspection ($300-500)
Saving Strategies
Automate Savings
Set up automatic transfers to a dedicated down payment savings account each payday.
High-Yield Savings
Keep your down payment fund in a high-yield savings account to earn interest while you save.
Down Payment Assistance
Many states offer down payment assistance programs for first-time homebuyers. Check your state's housing authority.
Important Considerations
- Keep 3-6 months of expenses as an emergency fund separate from your down payment
- Don't drain all savings—you'll need money for moving, furniture, and repairs
- Gift funds from family may be allowed, but lenders require documentation
- Large deposits before closing may need to be explained to the lender
Frequently Asked Questions
How much should I put down on a house?
While 20% is ideal to avoid PMI and get better rates, many buyers put down 5-10%. FHA loans require just 3.5%, and VA/USDA loans allow 0% down for eligible borrowers. Consider your savings, monthly budget, and how long you plan to stay in the home. A larger down payment means lower monthly payments and less interest over time.
What is PMI and how do I avoid it?
Private Mortgage Insurance (PMI) is required on conventional loans when you put down less than 20%. It typically costs 0.5-1% of the loan amount annually. You can avoid PMI by putting 20% down, using a piggyback loan (80-10-10), or choosing an FHA loan (which has its own mortgage insurance). PMI can be removed once you reach 20% equity.
What other costs do I need besides the down payment?
Plan for closing costs (2-5% of home price), which include loan fees, title insurance, appraisal, and prepaid items. You'll also need funds for moving, immediate repairs, furniture, and an emergency fund. Budget for at least 25-30% of the home price for all upfront costs, not just the down payment.
How long does it take to save for a down payment?
It depends on the home price, down payment percentage, and your savings rate. For a $400,000 home with 10% down ($40,000), saving $1,000/month takes about 3.3 years. Many first-time buyers take 3-7 years to save. Consider down payment assistance programs, employer matching programs, or gifts from family to accelerate the timeline.