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Down Payment Calculator

Calculate how much you need for a down payment and closing costs. See PMI costs, loan-type minimums (FHA, VA, conventional), and a savings timeline to reach your goal.

Calculation Inputs

Interest earned on your savings (HYSA, CD, etc.)

Typically 2–5% of purchase price. Includes lender fees, title, escrow.

Results computed instantly — your data never leaves your device.

Live Results

Real-Time

Down Payment Needed

$80,000 (20%)

Closing Costs

$12,000

3% of purchase price

Total Cash Needed

$92,000

Still Need to Save

$62,000

Loan Amount

$320,000

80% LTV

Months to Goal

39 months

Ready ~2029-10

100% Client-SidePrivate & Secure
Savings Progress33%
Current: $30,000Goal: $92,000

How to Use the Down Payment Calculator

  1. 1

    Enter the home purchase price.

  2. 2

    Select your loan type — the required minimum down payment fills automatically (3.5% for FHA, 0% for VA/USDA, or choose Custom).

  3. 3

    Enter your current savings and how much you can save each month.

  4. 4

    Add your savings account yield (high-yield savings or CD rate) for an accurate timeline.

  5. 5

    Review the total cash needed (down payment + closing costs), PMI estimate, and months to reach your goal.

Formula & Mathematical Basis

Down Payment = Home Price × Down Payment% | Closing Costs = Home Price × Closing Cost%

Variable Key

LTV

Loan-to-Value = Loan Amount ÷ Home Price × 100 — determines PMI requirement

PMI

Estimated at 0.7% of loan amount annually when LTV > 80%; actual rate varies by lender and credit score

Total Cash Needed

Down Payment Amount + Closing Cost Amount

Months to Goal

ln(Gap × r / PMT + 1) / ln(1 + r), where r = monthly yield and PMT = monthly savings

📝 Closing costs vary by state, lender, and loan type. The 3% default is a conservative middle estimate. VA and USDA loans have no PMI but may have funding fees.

Step-by-Step Examples

1

First-time buyer — FHA loan

Scenario: $350,000 home, FHA 3.5% down, $15,000 saved, $2,000/month savings, 4.5% HYSA yield.

  1. 1.Down payment: $350,000 × 3.5% = $12,250.
  2. 2.Closing costs at 3%: $350,000 × 3% = $10,500.
  3. 3.Total cash needed: $12,250 + $10,500 = $22,750.
  4. 4.Cash gap: $22,750 − $15,000 = $7,750.
  5. 5.Months to save $7,750 at $2,000/mo (4.5% yield): ≈ 4 months.
✅ Ready in ~4 months. PMI ≈ $191/month until 20% equity.
2

Conventional 20% — no PMI

Scenario: $450,000 home, 20% down, $50,000 saved, $3,000/month savings.

  1. 1.Down payment: $450,000 × 20% = $90,000.
  2. 2.Closing costs at 3%: $13,500.
  3. 3.Total cash needed: $103,500.
  4. 4.Cash gap: $103,500 − $50,000 = $53,500.
  5. 5.Months to save at $3,000/mo: ≈ 17 months.
✅ Ready in ~17 months. No PMI — saves ~$175/month vs 10% down.

Practical Use Cases

  • First-time homebuyers planning their purchase timeline
  • Comparing FHA vs conventional loan total cost including PMI
  • Setting a monthly savings target to buy within a specific timeframe
  • Understanding how down payment size affects monthly payment and total interest
  • Evaluating whether to wait for 20% down or buy sooner with PMI

Common Mistakes to Avoid

  • Forgetting closing costs — buyers who only save for the down payment are often surprised by an additional 2–5% needed at closing.
  • Ignoring PMI when comparing loan options — FHA MIP can exceed conventional PMI and lasts the life of the loan if down payment < 10%.
  • Depleting emergency savings — leaving nothing after closing puts you at financial risk for repairs and unexpected expenses.
  • Not accounting for rate of return on savings — a 4–5% HYSA meaningfully shortens the timeline via compound interest.

Glossary of Terms

LTV (Loan-to-Value)
The ratio of your loan amount to the home's purchase price or appraised value. Higher LTV = less equity = higher risk to lenders.
PMI (Private Mortgage Insurance)
Insurance protecting the lender against borrower default on conventional loans with LTV above 80%.
MIP (Mortgage Insurance Premium)
FHA's equivalent of PMI. Includes an upfront premium (1.75% of loan) and annual premium (0.55–1.05%).
Closing Costs
Fees paid at closing beyond the down payment: origination, appraisal, title, escrow, prepaid taxes and insurance.

Frequently Asked Questions

How much down payment do I really need?

▾
Minimum requirements range from 0% (VA, USDA) to 3% (some conventional loans), 3.5% (FHA), 5–10% (standard conventional). However, 20% down eliminates PMI and often secures better rates — saving thousands over the loan life.

What is PMI and when can I remove it?

▾
Private Mortgage Insurance protects the lender if you default. It's required on conventional loans with less than 20% down, typically costing 0.5–1.5% of the loan annually. You can request removal when your equity reaches 20%; it auto-cancels at 22% under the Homeowners Protection Act.

What are closing costs and how much should I budget?

▾
Closing costs cover lender fees (origination, appraisal, credit report), title insurance, escrow, prepaid taxes, and insurance. They typically run 2–5% of the purchase price. Some costs are negotiable; sellers occasionally cover a portion.

Is a larger down payment always better?

▾
A larger down payment reduces your monthly payment, eliminates PMI, and lowers total interest. However, it also ties up liquid capital. Consider keeping 3–6 months of expenses as an emergency fund and not draining retirement accounts, even for a larger down payment.

Can I use gift funds for my down payment?

▾
Yes — most loan programs allow gift funds from family members. FHA allows 100% gifted down payment. Conventional loans may require you to contribute a minimum amount from your own funds depending on the loan-to-value ratio. A gift letter is required.

Sources & References

  1. [1]
    Buying a Home— Consumer Financial Protection Bureau, 2024
  2. [2]
    Down Payment Assistance Programs— U.S. Department of Housing and Urban Development (HUD), 2024

CalculatorFree Mortgage TeamCertified Mortgage Planning Specialist (CMPS) Advisory Review

Down payment guidance verified against HUD, FHA, VA, and CFPB published guidelines.

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