Down Payment Calculator
Work out the cash you need to buy - down payment, closing costs, and how long saving will take - plus what PMI costs at each threshold.
Down Payment Calculator
Below 20% on a conventional loan, lenders add mortgage insurance.
Typically 2-5% of the price: appraisal, title, origination and prepaid items.
Cash you need at closing
$92,000
Down payment
$80,000
20% of the price
Loan amount
$320,000
Monthly PMI
None
20% or more down
Time to save
2 years 11 months
Saving $1,500/mo
Down payment options
The same home at each common threshold. Note that PMI does not fall smoothly: the rate steps down at 5%, 10% and 15% as well as ending at 20%.
| Down | Cash | Loan | Monthly PMI |
|---|---|---|---|
| 3% | $12,000 | $388,000 | $372 |
| 3.5% | $14,000 | $386,000 | $370 |
| 5% | $20,000 | $380,000 | $317 |
| 10% | $40,000 | $360,000 | $225 |
| 15% | $60,000 | $340,000 | $142 |
| 20% | $80,000 | $320,000 | — |
Cash to closing
- Home price$400,000
- Down payment (20%)$80,000
- Closing costs (3%)$12,000
- Total cash needed$92,000
- Already saved− $40,000
- Still to save$52,000
Lenders also want to see reserves after closing — often two to six months of payments still in the account. Budget beyond this figure, not to it.
The link carries the values you entered, so whoever opens it sees the same result. Nothing is stored on our side — the numbers travel in the link itself.
How the down payment calculation works
The down payment is the part of the purchase you pay in cash. Everything else is borrowed. But the cash you actually need at closing is bigger than the down payment alone, and the 20% figure everyone quotes is a threshold rather than a requirement.
What you actually need at closing
cash needed = down payment + closing costs
Closing costs run 2% to 5% of the price and cover the appraisal, title search and insurance, lender origination, credit report, and prepaid taxes and insurance. On a $400,000 home with 20% down, that is $80,000 plus roughly $12,000 — $92,000 in cash, not $80,000.
Lenders also want to see reserves left after closing, often two to six months of payments. Budget past the closing figure rather than exactly to it.
The 20% threshold and PMI
You do not need 20% down. Conventional loans go to 3%, FHA loans to 3.5%, and VA and USDA loans can require nothing at all. What 20% buys you is the avoidance of private mortgage insurance — a monthly charge that protects the lender if you default and does nothing for you.
PMI does not fall smoothly as your down payment grows; it steps:
| Down payment | Typical annual PMI |
|---|---|
| Under 5% | ~1.15% of the loan |
| 5–9.99% | ~1.00% |
| 10–14.99% | ~0.75% |
| 15–19.99% | ~0.50% |
| 20% or more | none |
On a $360,000 loan at 10% down, that is roughly $225 a month — $2,700 a year buying you nothing.
Should you wait to reach 20%?
It depends on which is moving faster: the price of the house, or your savings. If you can save the gap in a year and prices are flat, waiting is clearly right. If prices are rising 5% a year, a $400,000 home costs $20,000 more by the time you are ready — more than the PMI you avoided.
The honest middle path is that PMI is cancellable. On most conventional loans you can request removal once you reach 20% equity, and it must come off automatically at 22% based on the original schedule. That makes it a temporary cost rather than a permanent one, which changes the arithmetic considerably.
FHA is different
FHA mortgage insurance works differently from conventional PMI: there is an upfront premium of 1.75% of the loan, and the annual premium generally lasts the life of the loan if you put down less than 10%. It cannot be cancelled by building equity — you have to refinance out of it. That is a significant difference from the table above.
Disclaimer: This calculator provides estimates for informational purposes only and is not financial advice. Your actual rate, taxes, fees, and payment will vary - confirm figures with a licensed lender or financial professional.
Frequently asked questions
How much do I need for a down payment?
Less than most people assume. Conventional loans start at 3% for qualified buyers, FHA at 3.5%, and VA and USDA loans can require nothing down. Twenty percent is not a requirement - it is the point at which private mortgage insurance stops. What you genuinely need is the down payment plus 2% to 5% in closing costs, plus enough reserves left over to satisfy the lender.
What is PMI and how much does it cost?
Private mortgage insurance is a monthly charge lenders add when your down payment is under 20% on a conventional loan. It protects the lender, not you. The rate is typically 0.5% to 1.15% of the loan annually, higher the smaller your down payment - roughly $225 a month on a $360,000 loan at 10% down. It can be cancelled once you reach 20% equity, which makes it temporary rather than permanent.
Should I wait until I have 20% saved?
Compare the PMI you would avoid against what the house costs while you wait. If prices are flat and the gap is small, waiting is straightforward. If prices are rising faster than you save, waiting costs more than the insurance. Because PMI is cancellable on conventional loans once you reach 20% equity, buying earlier with less down is often the better arithmetic even though it feels worse.
What do closing costs actually cover?
Lender fees such as origination and underwriting; third-party services including the appraisal, title search, title insurance and survey; government recording and transfer taxes; and prepaid items - the first year of homeowners insurance and several months of property tax into escrow. Together they typically run 2% to 5% of the purchase price. The Loan Estimate itemises every line three days after you apply.
Can I use gift money for a down payment?
Generally yes, from a family member, with a gift letter confirming it is not a loan. Lenders want to see the money seasoned in your account, usually for 60 days, and they will trace large recent deposits. Some loan programmes limit how much of the down payment can be gifted or require a minimum contribution from your own funds, so confirm the rules for your specific programme before relying on it.
Does a bigger down payment get me a better rate?
Usually a little. Lenders price by loan-to-value ratio, and the pricing improves at 80%, 75% and sometimes 60% LTV. The difference is typically a fraction of a percentage point - meaningful over 30 years, but far smaller than the effect of removing PMI. The larger benefit of a bigger down payment is simply borrowing less, which lowers both the payment and the total interest.
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