Down Payment Calculator
Pick a home price and a down payment percentage. See the cash you need at closing, the monthly payment it buys, whether PMI applies — and how long the savings will take at your current pace.
Your Purchase
$40,000 down · $360,000 loan · 90.0% LTV
Typically 0.5%–1.5% of the loan per year. Ignored at 20% down or more.
Usually 2%–5% of the price — $12,000 here.
Cash You Need at Closing (10% Down)
$52,000
$40,000 down payment + $12,000 closing costs
Loan Amount
$360,000
Monthly P&I
$2,275
Monthly PMI
$180
Monthly Total
$2,455
At 10% down your LTV is 90.0%, so PMI applies.
You'll pay $180 a month for it — about $19,440 in total before it terminates automatically after 9 yr 1 mo of scheduled payments. Putting $40,000 more down would reach 20%, remove PMI, and cut the monthly payment by $433.
3% vs 5% vs 20% Down on $400,000
Every row uses your rate (6.5%) and term (30 years). PMI stops once the balance reaches 78% of the price.
| Down | Cash needed | Loan | P&I | PMI/mo | Total/mo | PMI until it cancels |
|---|---|---|---|---|---|---|
| 3% | $12,000 | $388,000 | $2,452 | $194 | $2,646 | $27,742 over 12 yr |
| 5% | $20,000 | $380,000 | $2,402 | $190 | $2,592 | $25,460 over 11 yr 3 mo |
| 10% | $40,000 | $360,000 | $2,275 | $180 | $2,455 | $19,440 over 9 yr 1 mo |
| 20% | $80,000 | $320,000 | $2,023 | $0 | $2,023 | None |
One caveat: a single PMI rate is applied to every row. In practice insurers charge more as LTV rises, so a real 3%-down quote carries a higher PMI rate than a 10%-down quote — the gap between the top and bottom rows is wider than shown. Your credit score moves the rate too. Run your own quote through the PMI calculator.
Time to Save for This Down Payment
How long the $52,000 takes at your current pace, counting contributions only.
Still to save
$47,000
Down payment only
2 yr 11 mo
Down payment + closing
3 yr 11 mo
This assumes your savings sit in cash and earn nothing. Park the money in a high-yield account and the compounding shortens the timeline — the down payment savings goal calculator solves for the monthly contribution with a savings rate factored in.
What a Down Payment Actually Changes
The down payment is the slice of the purchase price you pay in cash. Everything else is borrowed, so every dollar down is a dollar not financed — and it moves three numbers at once:
- The loan balance. A smaller loan means a smaller principal and interest payment, and less interest paid over the life of the loan.
- Whether PMI applies. Cross 20% down and mortgage insurance disappears entirely, which is a bigger monthly swing than most people expect.
- Your interest rate.Lenders price high loan-to-value loans higher because there's less equity behind them if they have to foreclose.
What it does notchange is the rest of the payment. Property taxes, homeowners insurance, and HOA dues are set by the house, not by your loan, so they cost the same at 3% down and at 20% down. When you compare payments across down payment levels, you're only ever comparing principal, interest, and PMI.
3% vs 5% vs 20%: Reading the Comparison
The table above prices each option against the same home, rate, and term, and the pattern holds no matter what you type into it. Between 3% and 5% down, the monthly difference is modest — you've moved the loan balance by 2% of the price, and PMI still applies to both. The step to 20% is different in kind: the loan drops substantially and the PMI line goes to zero.
That's the real decision. The first few percentage points of down payment buy you a slightly cheaper payment. The last few, the ones that carry you over the 20% line, buy you a structurally different loan. Anywhere in between — 5%, 10%, 15% — you are paying PMI, so the only question is how much loan you're insuring.
The case for a smaller down payment is that waiting has a cost too. Rent paid while you save is gone, home prices may rise faster than your savings, and PMI is temporary while a missed market is not. The case for 20% is that you buy a cheaper loan permanently and keep the insurance premium in your pocket. Run both against what you can actually borrow with the affordability calculator.
How Down Payment Affects PMI
Conventional lenders require private mortgage insurance whenever the loan exceeds 80% of the home's value. PMI protects the lender if you default; it does nothing for you except make the loan possible with less cash. The premium is typically 0.5% to 1.5% of the loan amount per year, billed monthly.
Two factors drive where in that range you land: your loan-to-value ratio and your credit score. A 3%-down borrower with a middling score is quoted near the top of the range; a 15%-down borrower with excellent credit lands near the bottom. This compounds the arithmetic against small down payments — the low-down borrower is insuring a larger loan at a higher rate.
PMI doesn't last forever. Under the Homeowners Protection Act you can request cancellation once the balance reaches 80% of the home's original value, and your lender must terminate it automatically at 78%. Both thresholds are measured against the original purchase price on the scheduled amortization, so the date is knowable the day you close — the calculator above shows it. Extra principal payments can get you to the 80% request point sooner.
Note that FHA loans work differently. Their mortgage insurance premium is not PMI, and on most FHA loans originated today with less than 10% down it lasts the entire life of the loan rather than cancelling at 78%. If you're weighing FHA against a low-down conventional loan, that distinction usually matters more than the rate. Mortgage insurance explained covers both, and the PMI calculator prices a specific loan.
Time to Save for a Down Payment
The savings calculator above answers the question people actually ask: at what I'm putting away each month, when can I buy? It counts contributions only, so the timeline it gives you is the conservative one — money sitting in a high-yield account earns interest and gets there sooner.
Two things make the target larger than a naive down payment number. Closing costs are due the same day, so the calculator adds them in; budget 2% to 5% of the price and size them properly with the closing costs calculator. And you should not arrive at closing with an empty account — lenders often want to see reserves, and a house generates expenses immediately.
If the timeline comes back longer than you can stomach, you have four levers, in rough order of how much they move: lower the target price, accept a smaller down payment and pay PMI, raise the monthly contribution, or move the savings somewhere it earns a real return. For the last one — solving for the monthly contribution with compounding factored in — use the down payment savings goal calculator.
Ways to Buy With Less Down
- Conventional 3% down. Available to qualifying buyers, with PMI that cancels at 78% LTV. Often the cheapest low-down option for strong credit.
- FHA, 3.5% down. More forgiving on credit score, but the insurance premium typically lasts the life of the loan below 10% down.
- VA loans, nothing down. No mortgage insurance at all for eligible service members and veterans; a one-time funding fee applies instead.
- USDA loans, nothing down. For qualifying buyers in designated rural areas, subject to income limits.
- A piggyback second mortgage. Caps the first lien at 80% so PMI never attaches, at the cost of a higher-rate second loan that doesn't cancel on its own.
- Down payment assistance. State and local programs offer grants and forgivable second loans to first-time and income-qualified buyers. Terms vary widely by jurisdiction — check your state housing finance agency.
Related Reading
- PMI calculator — what mortgage insurance costs on your loan, and the month it cancels.
- First-time homebuyer guide — where the down payment fits in the full timeline from credit check to closing.
- Down payment savings goal calculator — the monthly contribution needed to hit your target, with interest factored in.
Frequently Asked Questions
How much down payment do I need to buy a house?
There is no universal minimum — it depends on the loan program. Conventional loans backed by Fannie Mae and Freddie Mac go as low as 3% down for qualifying buyers. FHA loans require 3.5% down with a credit score of 580 or higher, and 10% below that. VA loans (for eligible service members and veterans) and USDA loans (in designated rural areas) can require nothing down. The 20% figure people quote isn't a requirement at all; it's the threshold above which conventional lenders stop charging private mortgage insurance.
Is it better to put 5% or 20% down?
Twenty percent down means no PMI, a smaller loan, a lower monthly payment, and usually a slightly better interest rate. Five percent down means you buy years earlier, keep cash in reserve, and start building equity while you would otherwise be renting. Neither answer is universally right. The comparison table above shows the exact monthly gap for your price and rate — weigh that against what it costs you, in rent and in home-price appreciation, to wait for the larger down payment.
Does a bigger down payment lower my interest rate?
Often, yes, but the effect is smaller than people expect. Lenders apply loan-level price adjustments based on loan-to-value ratio and credit score, so a 95% LTV loan typically prices above an 80% LTV loan for the same borrower. The pricing tiers are discrete, not continuous — crossing from 90% to 89.9% LTV may do nothing, while crossing the 80% line does. Ask your lender for a rate sheet at several down payment levels rather than assuming a smooth curve.
Do I need the down payment and closing costs in cash?
Both are due at closing, so yes, you need the full amount available — which is why the calculator above adds them together. Closing costs typically run 2% to 5% of the price and cover lender fees, title insurance, appraisal, prepaid taxes, and insurance escrow. Sellers sometimes agree to pay part of them as a concession, and some lenders offer credits in exchange for a higher rate, but you should plan on having the cash.
Can my down payment be a gift?
Most loan programs allow gift funds from a family member, provided the gift is documented with a signed letter stating it doesn't have to be repaid, plus proof the money came from the giver's account. Lenders also want the funds seasoned in your account, typically for at least 60 days before closing, so a last-minute deposit will raise questions during underwriting.
Should I put every dollar I have into the down payment?
No. Closing empties your account on the same day you take on maintenance, moving costs, and whatever the inspection found. Lenders often want to see reserves — a few months of mortgage payments still in the bank after closing — and it's sound practice regardless. A slightly smaller down payment with a cash cushion is safer than a larger one that leaves you with nothing.