Down Payment Calculator
Calculate your down payment amount, see how it affects PMI, and determine how long it will take to save for your target.
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How It Works
Your down payment is the upfront cash you pay toward a home purchase. A larger down payment reduces your loan amount, lowers your monthly payment, and can eliminate private mortgage insurance (PMI). This calculator shows how your down payment percentage affects your costs and how long it will take to save your target amount.
The Formula
Loan Amount = Home Price - Down Payment
PMI (if < 20% down) ~ 0.5% to 1.5% of loan amount annually
Variables
- Down % — Percentage of home price paid upfront (typically 3.5% to 20%+)
- PMI — Private Mortgage Insurance, required when down payment is less than 20%
- LTV — Loan-to-Value ratio = Loan Amount / Home Price
Worked Example
On a $350,000 home with 10% down: Down payment = $35,000, Loan = $315,000. Monthly PMI at 0.75% = $315,000 x 0.0075 / 12 = $197/month. At 20% down ($70,000), PMI is eliminated, saving $197/month.
Practical Tips
- Putting 20% down eliminates PMI, which can save $100-$300 per month depending on your loan amount.
- Some lenders offer lender-paid PMI (LPMI) in exchange for a slightly higher interest rate.
- First-time buyer programs in many states offer down payment assistance grants or low-interest second mortgages.
- Keep 3-6 months of expenses as an emergency fund separate from your down payment savings.
- Consider high-yield savings accounts or CDs for your down payment fund to earn interest while saving.
Frequently Asked Questions
What is the minimum down payment for a home?
Conventional loans require as little as 3% down (for first-time buyers). FHA loans require 3.5%. VA and USDA loans allow 0% down for eligible borrowers.
What is PMI and how do I get rid of it?
PMI (Private Mortgage Insurance) protects the lender if you default. It is required when you put less than 20% down on a conventional loan. You can request PMI removal once your loan balance reaches 80% of the original home value, and it auto-cancels at 78%.
Is it better to put 20% down?
Putting 20% down avoids PMI and gives you immediate equity, but it is not always the best strategy. If it depletes your savings, a smaller down payment with reserves may be safer. Compare the PMI cost to alternative uses of your cash.
Can I use gift money for a down payment?
Yes, most loan programs allow gift funds from family members for the down payment. You will need a gift letter stating the money is a gift, not a loan. FHA, VA, and conventional loans all allow this.
How much should I save beyond the down payment?
Plan for 2-5% of the home price in closing costs plus 3-6 months of housing payments as reserves. Lenders may also require proof of reserves as part of your loan approval.