Down Payment Calculator – How Much Do You Need on a House?

The total cash needed combines your down payment and an estimate of closing costs. The loan-to-value ratio this produces determines whether PMI applies on a conventional loan: at or above 20% down (80% LTV or lower), PMI is not required. Below that threshold, PMI is added to your monthly cost until your equity, through payments and appreciation, brings the loan back to 80% or less of the home's value.

Enter the price of the home you are targeting and the down payment you have in mind, either as a percentage or a dollar figure. Add an allowance for closing costs — they are due at the same time and are frequently forgotten when people set a savings goal.

Then describe your savings plan: what you have set aside, what you add each month, and the yield on the account holding it. The calculator compounds monthly and reports how long the remaining gap takes to close.

Use the scenario table to see the trade-off directly. A smaller down payment gets you into a home sooner but raises the loan, the payment and, below 20%, adds mortgage insurance.

Down payment = home price × down payment percentage

Cash needed = down payment + closing costs

The savings projection compounds the balance monthly and adds each contribution at the end of the month:

Balance next month = balance × (1 + annual rate ÷ 12) + monthly contribution

PMI, where required, is charged as an annual percentage of the loan:

Monthly PMI = loan amount × PMI rate ÷ 12

For a $400,000 home with 20% down, the down payment is $80,000. Adding 3% closing costs ($12,000) makes the true cash requirement $92,000. With $35,000 saved, the gap is $57,000.

Saving $1,500 a month in an account yielding 4% closes that gap in roughly 35 months. At 10% down instead, the cash requirement falls to $52,000 and is reached in about a year — but the loan rises to $360,000 and PMI of about $150 per month applies until the balance reaches 80% of value.

Loan-to-value ratio (LTV)

LTV is the loan divided by the home's value. A 20% down payment produces 80% LTV, the conventional threshold below which PMI is required.

Loan program

Conventional, FHA, VA and USDA loans each set different minimum down payments and different mortgage insurance structures.

Credit profile

A stronger credit score can lower the PMI rate charged for the same down payment, since PMI pricing is risk-based.

Cash reserves after closing

Lenders often want to see reserves remaining after the down payment and closing costs are paid — put every dollar into the down payment and you may fail that check.

Gift funds and seasoning

Funds from family or assistance programs are usually allowed but must be documented; unexplained large deposits shortly before application can require extra underwriting.

• Forgetting closing costs when setting a savings goal

  Closing costs are due alongside the down payment and are easy to overlook when budgeting for just the down payment percentage.

• Confusing earnest money with the down payment

  Earnest money is a smaller good-faith deposit paid when the contract is signed, held in escrow, and credited toward the down payment at closing — it is not an additional cost.

• Assuming PMI cancels automatically the moment you hit 20% equity

  Automatic cancellation under federal law happens at 78% of the original value on the original schedule; reaching 80% only creates the right to request cancellation, which the lender must still process.

• Putting every available dollar into the down payment

  Depleting cash reserves to maximize the down payment can leave no cushion for moving costs, repairs or an income disruption right after closing.

• Not documenting gift funds properly

  An undocumented deposit from a relative can stall or sink an approval; a gift letter and a paper trail are required by nearly every loan program.

• Budget for closing costs separately from the down payment so a last-minute shortfall does not force you to shrink the down payment.
• If a gift will fund part of your down payment, get the gift letter and transfer documented well before you apply.
• Compare the monthly cost of a smaller down payment plus PMI against a larger down payment plus reduced reserves before deciding.
• Ask your lender in writing when PMI is scheduled to reach the 80% and 78% thresholds so you can track your right to request cancellation.
• If you qualify for a VA or USDA loan, compare the total cost including their funding/guarantee fees against a conventional loan with PMI.

This calculator does not model FHA's upfront and ongoing mortgage insurance premium structure, the VA funding fee, or USDA's guarantee fee, each of which differs from conventional PMI in cost and duration. It also assumes a 30-year fixed loan for the payment comparison and a constant savings return, neither of which may match your actual financing or account.

What this calculator assumes

• Contributions are made at the end of each month and the balance compounds monthly.
• The savings return is constant and interest is not reduced by tax.
• Closing costs are estimated as a flat percentage of the purchase price.
• Loan comparisons use a 30-year fixed term.

What it does not account for

• Down payment assistance programs, gift funds and employer contributions.
• Reserve requirements — lenders often want funds remaining after closing.
• Home price changes while you save, which can move the target.
• Loan programs with reduced or zero down payment requirements, such as VA and USDA.

• Consumer Financial Protection Bureau — PMI cancellation rights — Explains PMI and cancellation under the Homeowners Protection Act.
• HUD — FHA mortgage insurance — FHA loan program and mortgage insurance premium structure.
• VA.gov — Home loan funding fee — VA loan funding fee and down payment rules.