Down Payment Calculator

A down payment calculator answers the two questions that keep every future homeowner up at night: how much cash do I actually need, and how does that number change what I'll pay every month for the next 30 years? Most buyers fixate on the home's sticker price and forget that the size of your down payment quietly reshapes your entire mortgage — from the interest rate lenders offer to whether you'll owe PMI and for how long. Shift from 5% down to 20% down on a $350,000 home and you'll save roughly $475 a month and over $97,000 in total interest. That single decision matters more than almost anything else in the purchase.

What Is a Down Payment?

A down payment is the cash you pay upfront when purchasing a home. It reduces the amount you need to borrow, and lenders use it to gauge your financial stake in the property. If you buy a $350,000 house and put $35,000 down, you're borrowing $315,000. That 10% ratio is your loan-to-value (LTV), one of the most important numbers in a mortgage application.

Higher down payments reduce risk for the lender. Less risk means better loan terms for you: lower rates, no PMI, fewer fees. The CFPB recommends putting down as much as you can comfortably afford without draining your emergency fund — but the minimum varies by loan program.

How Down Payment Percentage Affects Your Mortgage

Every dollar you don't put down is a dollar you borrow — plus decades of interest on top. A smaller down payment increases your loan amount, which raises your monthly payment, total interest, and often triggers PMI. Here's how the math cascades on a $350,000 home at 6.5% over 30 years:

The jump from 3% to 20% down saves $574 per month (including PMI) and nearly $76,000 in total interest. That's the gap between a tight budget and breathing room. You can plug your own numbers into our mortgage calculator to see exactly how rate and term interact with your down payment.

Worked Example: $350K Home at 6.5%

Let's walk through a real scenario. Sarah wants to buy a $350,000 home. She's saved $18,000 and can put aside $1,200 per month in a high-yield savings account earning 4.5% APY. She's weighing two options: buy now with 5% down or wait and save to 20%.

Option A — Buy now with 5% ($17,500):Sarah's loan is $332,500. At 6.5% over 30 years, her monthly P&I is $2,102. PMI adds about $194 per month until she reaches 80% LTV, roughly 9 years of extra payments. Total PMI cost: about $20,952. Total interest over the loan: $424,199.

Option B — Wait and save to 20% ($70,000):Starting from $18,000 and saving $1,200/month at 4.5% APY, Sarah reaches $70,000 in about 41 months — just under 3.5 years. Her loan drops to $280,000. Monthly P&I: $1,770. No PMI. Total interest: $357,194.

Option B saves Sarah $67,005 in interest plus $20,952 in PMI — over $87,000 total. But she also pays roughly 41 months of rent while waiting, which at $1,800/month is $73,800. The net savings of waiting are about $13,200. Not nothing, but not the slam dunk most articles make it seem. If home prices rise 3% annually during those 41 months, Sarah's target price goes from $350,000 to $387,000, erasing the advantage entirely.

PMI: The Hidden Cost of Low Down Payments

Private mortgage insurance protects the lender — not you — when your down payment is below 20%. PMI typically costs 0.5% to 1.5% of the loan balance per year. On a $315,000 loan, that's $131 to $394 per month. It's not permanent, but it's not cheap either.

On conventional loans, PMI drops off automatically when your balance hits 78% of the original home value. You can request cancellation at 80%. FHA loans are different — they require mortgage insurance premiums (MIP) for the life of the loan if your down payment was under 10%. With 10%+ down, FHA MIP drops off after 11 years. The HUD loan comparison page has the latest details on FHA vs. conventional insurance rules.

Here's the real cost most people miss: PMI doesn't build equity. Every dollar you send toward PMI is gone forever — unlike principal, which at least reduces your balance. On a 10% down conventional loan, you'll pay roughly $22,000 in PMI before it drops off. That's a used car, a kitchen renovation, or two years of property taxes. To see how PMI fits into the full purchase picture — alongside closing costs, escrow reserves, and monthly PITI — run your numbers through our home buying calculator.

Down Payment Benchmarks by Loan Type

Minimum down payment requirements vary by loan program. Here's what each major program requires:

VA loans stand out because they require nothing down and charge no monthly mortgage insurance. The one-time funding fee (1.25% to 3.3% of the loan) can be rolled into the mortgage. If you qualify, it's almost always the best deal available. To see how these different programs affect what you can afford, try our home affordability calculator.

Building a Savings Plan That Actually Works

Knowing you need $35,000 is one thing. Actually getting there requires a plan with concrete numbers and a timeline. Three levers control how fast you save: how much you contribute each month, what interest your savings earn, and how aggressively you cut expenses.

• Automate transfers.Set up an automatic transfer from checking to a dedicated savings account on payday. Money you never see in your checking account is money you don't spend. Even $500/month reaches $18,000 in three years.
• Use a high-yield savings account. The difference between 0.5% APY at a traditional bank and 4.5% APY at an online bank is $1,400+ on $35,000 over two years. Our savings calculator can model exactly how much interest you'll earn at different rates.
• Set milestone checkpoints. Break your goal into quarters. If your target is $35,000 in 30 months, you need $8,750 every 7.5 months. Missing a checkpoint early gives you time to adjust — pick up overtime, cut a subscription, or extend the timeline by a few months.
• Keep down payment funds separate from emergency savings. Lenders want to see 2-6 months of mortgage payments in reserve after closing. Draining your emergency fund for a bigger down payment leaves you one car repair away from missing a payment.

Common Down Payment Mistakes

• Draining your emergency fund.Putting every dollar into the down payment feels smart until the furnace dies three months after closing. Keep at least 3 months of expenses liquid after the purchase. That's $7,500-$15,000 for most households — not optional.
• Ignoring closing costs.Your down payment isn't the only cash you need at closing. Buyer closing costs run 2-5% of the purchase price. On a $350,000 home, that's $7,000 to $17,500 on top of your down payment. Use our closing costs calculator to get an itemized estimate so you're not blindsided at the closing table.
• Waiting too long for 20%. If home prices in your market are rising 4-5% annually, a $350,000 home costs $367,500 next year. Your 20% target moves from $70,000 to $73,500. In strong markets, buying with 10% down and paying PMI for a few years beats chasing a moving goalpost.
• Not sourcing gift funds properly.Lenders accept gift money for down payments, but they require a signed gift letter, a paper trail from the donor's account, and documentation that the money isn't a loan. Undocumented deposits in your account 60-90 days before closing will trigger underwriting questions that delay your loan.

When to Use This Calculator

• You're starting to save for a home and need a concrete monthly savings target with a timeline
• You're deciding between buying now with a small down payment or waiting to save more
• You want to see exactly how much PMI costs at 3%, 5%, 10%, or 15% down
• You're comparing how different down payment amounts change your monthly mortgage payment and total interest
• You received a gift or windfall and want to see how applying it to your down payment changes the picture