Down Payment Calculator
Home & savings plan
Enter a home price above zero to plan your down payment.
Advanced options
Enter a home price above zero to plan your down payment.
Know what this estimate is based on
- Jurisdiction
- United States — Truth in Lending (Regulation Z) governs the APR and the disclosures; pricing, underwriting and closing costs are the lender's and your state's
- Rules and time period
- Rates, fees and program limits are the figures you enter, not live quotes; FHA, VA and conforming limits change at least annually.
- Scope and limitations
- Educational estimate only. A lender may use a different compounding convention, day count, fee schedule, escrow or rounding rule, and eligibility, mortgage insurance and tax treatment turn on facts this page never sees. Only a Loan Estimate or a signed note binds a number.
- Source links checked
- Sep 19, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter the home price you are aiming at and the down payment percentage you plan to put down. The percentage is what sets your loan-to-value and decides whether PMI applies.
- 02
Enter what you have already saved and how much you can add each month — the two figures that set your timeline.
- 03
Open Advanced and set the PMI threshold, usually 20%, so the calculator can show how far you are from clearing it.
- 04
Still in Advanced, set your closing-cost estimate. This is the amount people most often leave out, and it is due in cash alongside the down payment.
- 05
Set an expected return if your savings are invested rather than sitting in cash, and a target timeline if you have a date in mind.
- 06
Read the down payment amount, the resulting loan, the loan-to-value, the total cash to close, and how long your plan takes to reach it.
Formula
Down payment = home price × down payment %. Loan = home price − down payment, and loan-to-value (LTV) = loan ÷ home price. Cash to close = down payment + closing costs, where closing costs = home price × closing-cost %. To reach that cash, your current savings grow at the expected return while you add a monthly amount; the plan reports both how long your pace takes to reach the cash to close and the monthly amount needed to reach it by your target date.
Example
On a $400,000 home with 20% down, the down payment is $80,000 and the loan is $320,000 — an 80% LTV that just clears the PMI threshold. With closing costs at 3% ($12,000), the cash to close is $92,000. Starting from $25,000 saved and adding $1,200 a month at a 4% return, you reach that $92,000 in about 4 years and 1 month. To be ready in 5 years instead, you'd only need to save about $927 a month.
Definitions
- Down payment
- The cash you put toward the purchase price. It reduces the loan and sets your starting equity.
- Loan-to-value (LTV)
- The loan divided by the home's value. A 20% down payment produces an 80% LTV, the usual threshold for avoiding PMI.
- PMI threshold
- The LTV at which private mortgage insurance stops being required, conventionally 80%. Below that threshold in equity terms, the lender charges for the extra risk.
- Cash to close
- Everything you must bring on completion day — down payment plus closing costs, less any credits. Always larger than the down payment alone.
- Closing costs
- Lender fees, title, appraisal, escrow set-up, recording and prepaid items, commonly 2-5% of the price.
- Earnest money
- A deposit paid when your offer is accepted, held in escrow and credited toward your cash to close.
- Seller concession
- An agreed contribution from the seller toward your closing costs. Limited by loan type, and a real lever in a slow market.
- Gift funds
- Money from a family member toward the purchase. Most loan programs allow it with a signed letter confirming it is a gift, not a loan.
- Reserves
- Savings a lender wants to see remaining after closing, often measured in months of payments. Emptying your accounts to close can itself jeopardize approval.
- Conventional 3% programs
- Loans allowing as little as 3% down for qualifying buyers. PMI applies, but the barrier to entry is far below the traditional 20%.
- FHA loan
- A government-backed loan allowing about 3.5% down with more flexible credit requirements, in exchange for mortgage insurance that often lasts the life of the loan.
- VA and USDA loans
- Zero-down programs for eligible veterans and for buyers in qualifying rural areas. VA loans charge a funding fee instead of monthly mortgage insurance.
- Opportunity cost
- What your savings would have earned invested elsewhere while you accumulate the deposit — the reason a very long savings horizon has a cost of its own.
- Emergency fund
- Savings held back for job loss or a large repair. It is not part of your down payment, and spending it to close is one of the more common early-ownership mistakes.
Good to know
The down payment sets almost everything else
Of all the numbers in a home purchase, the down payment is the one that propagates furthest. It determines the loan size, which determines the payment. It determines the loan-to-value ratio, which determines whether private mortgage insurance applies and often what interest rate you are offered. It determines your starting equity, which determines what happens if you need to sell early. That is why this calculator asks for it as a percentage rather than an amount. The percentage is what lenders price against, and the thresholds that matter — 20 percent for avoiding PMI, and pricing improvements that often appear around 20 and 25 percent — are all expressed that way. The corollary is that small changes here have large downstream effects. Moving from 10 percent to 20 percent on a $400,000 home is $40,000 more cash, and in exchange removes mortgage insurance entirely, cuts the loan by the same $40,000, and typically improves the rate. Whether that trade is worth making depends on how long it would take you to accumulate the difference and what happens to prices meanwhile. What the down payment does not do is buy you a house on its own. The cash you actually need on closing day is the down payment plus closing costs, and that combined figure — the cash to close — is the number to plan around. Buyers who save precisely to their down payment target arrive short by several thousand to tens of thousands of dollars, and discover it late in the process when options are limited. This calculator sizes both, and the timeline to reach them.
Twenty percent is a threshold, not a requirement
The belief that a home purchase requires 20 percent down is the single most common reason people delay buying longer than they need to, and it is not true. Conventional loans are available at 3 percent down for qualifying buyers. FHA loans require about 3.5 percent and accept weaker credit. VA loans, for eligible veterans and service members, require nothing down and charge a funding fee instead of monthly mortgage insurance. USDA loans offer zero down in qualifying rural areas. None of these is exotic; all are ordinary parts of the market. What 20 percent actually is, is the point at which private mortgage insurance stops being required on a conventional loan. Below it, the lender charges monthly for the additional risk. That is a real cost and it is worth avoiding when you reasonably can — but it is a monthly cost that ends, not a barrier to entry. The trade-off deserves to be made explicitly rather than assumed. Waiting three years to reach 20 percent means three more years of rent, three years of price movement you do not control, and three years of not building equity — against the saving of PMI and a smaller loan. In a flat market with cheap rent, waiting can win. In a rising market with expensive rent, it frequently does not. Set the PMI threshold in Advanced to see how far your plan is from clearing it, and use the mortgage calculator to price the monthly difference between the two scenarios. Then decide with both numbers visible, rather than deferring to a rule of thumb whose origin most people could not explain.
Cash to close: the number that catches people out
Closing costs are the reliably forgotten half of what you need on the day, and they are not small. They commonly run 2 to 5 percent of the purchase price and cover lender origination and underwriting, appraisal, title search and title insurance, escrow set-up, recording fees, and prepaid items — the first months of property tax and insurance that fund your escrow account from the start. On a $400,000 home that is roughly $8,000 to $20,000, due in cash, on top of the down payment. Because they are paid at closing and buy no asset, they behave like a transaction toll rather than an investment. They are also the reason a very short period of ownership rarely pays: you pay them going in and pay selling costs coming out, and only time between the two amortizes either. Some of the burden is negotiable. A seller concession — an agreed contribution toward your closing costs — is a normal part of a purchase agreement, though how much is permitted depends on the loan type and your down payment, and how much you can obtain depends on the market. In a slow market it is one of the more achievable asks and it goes directly to the cash you need. Set your closing cost estimate in Advanced and read the cash-to-close figure. Then plan your savings target around that number, not the down payment. If you would like a sharper estimate, a lender's Loan Estimate itemizes the actual charges for your specific loan and property, and you can request one before committing.
Where to keep the money while you save
The right place for a house deposit depends almost entirely on when you need it, and the mistake in both directions is common. Money needed within about two years should not be in the stock market. A fall of twenty or thirty percent is ordinary market behavior and entirely survivable over a decade, but if it happens the month before closing there is no recovery time and no purchase. Cash needed on a fixed date belongs somewhere that cannot fall: a high-yield savings account, certificates of deposit timed to mature before you need them, Treasury bills, or a money market fund. Money needed in five years or more can reasonably take some market exposure, accepting the volatility in exchange for the expected return. Between two and five years is genuine judgment, and a mixed approach — the core in cash, a portion invested — is a defensible answer. The expected return field in this calculator lets you model the difference, and it is worth being disciplined about what you enter. Applying an equity-like return to a two-year horizon produces a timeline that looks encouraging and is not a plan. If a market fall would delay your purchase by years, the return assumption should reflect an instrument that will not fall. One further consideration specific to deposits: whatever you use should be liquid on a known schedule. A CD that matures after your closing date, or an investment with a redemption delay, can be technically sufficient and practically useless. Match the maturity to the date.
Do not close with an empty emergency fund
The months immediately after buying are when unexpected costs cluster, and they are precisely the months when many buyers have no reserves left. The pattern is predictable. Moving costs more than expected. The inspection found things that were negotiated but not fixed. An appliance fails. The house needs blinds, a mower, a second set of keys, a plumber. Meanwhile the mortgage payment, larger than the rent it replaced, has started. A buyer who put every available dollar into the down payment to reach a threshold meets all of that with a credit card, at a rate that erases years of the PMI saving they were optimizing for. This is one of the clearest cases in personal finance where the mathematically tidy answer is the wrong one. Lenders take the same view. Many programs want to see reserves remaining after closing, often expressed as a number of months of housing payments, and a borrower who empties their accounts to close can weaken their own approval. Reserves are part of the underwriting picture, not an afterthought. The practical rule is to treat your emergency fund as not available for the purchase. Size your down payment from what remains after it. A slightly smaller deposit with three to six months of expenses intact is a materially stronger position than a larger deposit and nothing behind it — and it costs, at most, some PMI you can remove later. If that means the purchase has to wait or the price has to come down, that is the calculation telling you something true rather than getting in the way.
Gift funds, and the paperwork that goes with them
Family help with a deposit is common and every major loan program allows it, but the money has to arrive in a way the lender can verify. The requirement is a gift letter: a signed statement from the giver confirming the amount, the relationship, and — critically — that the money is a gift with no expectation of repayment. A lender cannot approve a loan against a hidden second debt, so an arrangement everyone privately understands as a loan is a problem, not a shortcut. The funds also need a paper trail. Money should move by traceable transfer, and it should arrive well before closing rather than appearing as a large unexplained deposit during underwriting, which triggers questions at the least convenient moment. Underwriters routinely ask about deposits that do not match your income pattern, and "my parents gave it to me" without documentation stalls files. How much of the down payment may be gifted varies by program, and some conventional loans have expected minimum contributions from the buyer's own funds in certain circumstances. Ask your lender specifically rather than assuming, because the rules differ between programs and change. There is a tax dimension for the giver, not the receiver. A gift above the annual exclusion — $19,000 per recipient for 2025, indexed and not moving every year — requires the giver to file Form 709, though it almost never produces an actual tax bill because the lifetime exemption absorbs it. A married couple gifting to a couple can use four exclusions. The gift tax calculator on this site sizes it. The recipient owes no federal income tax on a gift.
Two ways to read your timeline
The calculator answers the savings question from either end, and both readings are useful. The first is: given what I have and what I can save each month, when do I get there? That is the honest planning view, and its value is in making a vague intention concrete. "Sometime next year" becomes a date, and a date can be tested against a lease ending, a job change, or a school year. The second is: given a date I care about, what does the monthly saving need to be? Set a target timeline in Advanced and the requirement becomes explicit. Frequently it is larger than expected, and that is itself the most valuable output — better to learn in the first month that the plan needs adjusting than in the eighteenth. When the required saving is out of reach, there are four levers rather than one. Lower the price target. Lower the down payment percentage and accept PMI. Extend the timeline. Or increase what you save, which usually means a specific change rather than a general intention. Most workable plans use two of these rather than pushing one to its limit. A note on the horizon itself: a very long savings period has a cost that does not appear in the calculation. Prices may move, rates may move, and years of rent are paid meanwhile. A five-year plan to reach 20 percent on today's price is not a plan to buy today's house — it is a plan to buy whatever that money buys in five years. Shortening the timeline by accepting a smaller deposit is a legitimate response to that, not a compromise of principle.
What this calculator does not model
This tool sizes the cash and the timeline. Several adjacent things are outside it and belong in the decision. It does not calculate your monthly mortgage payment, your PMI in dollars, property tax or insurance. It produces the loan amount and loan-to-value; the mortgage calculator turns those into the payment you would actually carry, and that is the figure affordability depends on. It does not tell you what loan you would qualify for. Credit score, debt-to-income, employment history and reserves all govern that, and the answer differs by program. A pre-approval from a lender is the real version of this question. It applies a single expected return to your savings and assumes contributions are steady. Real saving is uneven, and a market-linked return is not a straight line — a two-year horizon in particular should not be modeled with an optimistic rate. It does not model inflation, so a long timeline's target is in today's dollars while the house's price may not be. It does not model seller concessions, gift funds arriving partway through, or the possibility of down payment assistance programs, which exist in many states and localities for first-time and moderate-income buyers and are widely under-claimed. Those are worth researching for your specific area before concluding you need to save more. And it does not model the decision itself. Whether to buy at all, at this price, on your horizon, is what the rent-vs-buy calculator is for.
Frequently asked questions
Do I really need 20% down?
No. Conventional loans go to 3% for qualifying buyers, FHA to about 3.5%, and VA and USDA loans to zero for those eligible. Twenty percent is not a requirement — it is the point at which private mortgage insurance stops applying. Waiting years to reach it is a real choice with a real cost, because prices and rates move while you save.
What does a smaller down payment actually cost?
Three things: PMI every month until you clear the threshold, a larger loan and therefore more interest over its life, and less equity if you need to sell early. Against that, you buy sooner, stop paying rent sooner, and keep cash available. This calculator shows the loan and LTV side; run the monthly figure through the mortgage calculator to see the payment difference.
How much is closing cost, really?
Commonly 2-5% of the purchase price, due in cash at closing on top of the down payment. On a $400,000 home that is roughly $8,000 to $20,000. It is the number that most often derails a plan built around the down payment alone, which is why it belongs in your target from the start rather than as a surprise at the end.
Should I save in cash or invest the money?
It depends on the horizon. Money needed within a couple of years belongs somewhere safe — a high-yield savings account, CDs or Treasury bills — because a market fall the month before closing is unrecoverable. Money needed in five years or more can reasonably take some market exposure. The expected return field lets you model the difference, but treat a high return on a short horizon as a hope, not a plan.
Can I use gift money from family?
Usually yes. Most loan programs allow gift funds toward a down payment with a signed letter confirming the money is a gift and not a loan. Lenders will want to see the paper trail, so the funds should arrive well before closing and not appear as an unexplained deposit. A large gift may also carry a filing obligation for the giver — see the gift tax calculator.
Should I empty my emergency fund to put more down?
Almost never. The months after closing are when unexpected costs cluster — repairs, appliances, moving, the things the inspection missed — and having no cushion at exactly that moment is how people end up borrowing expensively. Lenders often want to see reserves remaining after closing for the same reason. A slightly smaller down payment with an intact emergency fund is usually the sounder position.