Down Payment Calculator
Find out how much you need to save for a down payment and when you will reach your goal.
Down Payment Needed
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Savings Progress
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How Down Payment Savings Work
A down payment is the upfront cash a homebuyer pays toward the purchase price of a property, with the remainder financed through a mortgage. According to the National Association of Realtors (NAR), the median down payment for first-time homebuyers in 2025 was 8%, while repeat buyers put down a median of 19%. The traditional 20% target remains important because it eliminates the need for private mortgage insurance (PMI), which adds $50-$300 per month to your payment depending on loan size and credit score.
This calculator helps you determine exactly how much you need to save, how far your current savings get you, and when you will reach your goal at your current monthly savings rate. Understanding the savings gap and timeline is the essential first step toward homeownership. Use our Mortgage Calculator to see how different down payment amounts affect your monthly payment, and our House Affordability Calculator to determine the right price range for your income.
The Down Payment Savings Formula
The calculation is straightforward and based on the following formulas:
Down Payment Needed = Home Price x Down Payment Percentage
Savings Gap = Down Payment Needed - Current Savings
Months to Goal = Savings Gap / Monthly Savings Amount
Worked example: For a $350,000 home with a 20% down payment target, you need $70,000. If you have $15,000 saved and contribute $1,000 per month, your gap is $55,000 and it will take 55 months (about 4 years and 7 months) to reach your goal. Increasing your monthly savings to $1,500 cuts the timeline to approximately 37 months.
Key Terms You Should Know
- Private Mortgage Insurance (PMI): Insurance required by lenders when the down payment is less than 20%. PMI protects the lender (not you) if you default. It typically costs 0.5%-1.5% of the loan amount annually and can be removed once you reach 20% equity.
- Loan-to-Value Ratio (LTV): The percentage of the home's value that you are borrowing. A 20% down payment creates an 80% LTV. Lower LTV ratios qualify for better interest rates and terms.
- Closing costs: Fees beyond the down payment, including lender origination fees, appraisal, title insurance, taxes, and attorney fees. These typically total 2%-5% of the purchase price. Budget for them separately from your down payment.
- Earnest money deposit: A good-faith deposit (typically 1%-3% of the purchase price) submitted with your offer. This comes out of your down payment at closing, not in addition to it.
- High-yield savings account (HYSA): A savings account offering 4%-5% APY (as of 2026), ideal for down payment savings because it provides FDIC insurance and modest growth while keeping funds accessible.
Down Payment Requirements by Loan Type
Different mortgage programs have vastly different down payment requirements. The data below reflects 2025-2026 lending standards from the CFPB and major lender guidelines.
| Loan Type | Min. Down Payment | PMI Required? | Credit Score Min. |
|---|---|---|---|
| Conventional | 3%-5% | Yes, until 20% equity | 620+ |
| FHA | 3.5% | Yes (MIP for loan life) | 580+ (3.5%), 500-579 (10%) |
| VA | 0% | No (VA funding fee instead) | No minimum (lender-set) |
| USDA | 0% | Guarantee fee instead | 640+ |
| Jumbo | 10%-20% | Varies | 700+ |
Practical Down Payment Scenarios
Example 1: First-time buyer, $300,000 home, FHA loan (3.5% down). Down payment needed: $10,500. With $5,000 saved and $800/month contributions, the gap is $5,500 and the timeline is 7 months. However, FHA loans require mortgage insurance premiums (MIP) for the life of the loan, adding approximately $170/month. Total upfront cash needed including closing costs (3%): $10,500 + $9,000 = $19,500.
Example 2: Move-up buyer, $500,000 home, conventional (20% down). Down payment needed: $100,000. With $40,000 from home equity and $2,000/month savings, the gap is $60,000 and the timeline is 30 months. The 20% down payment eliminates PMI entirely, saving approximately $200-$350/month compared to 5% down. Use our Closing Cost Calculator to estimate additional fees.
Example 3: Veteran, $400,000 home, VA loan (0% down). No down payment required, but the VA funding fee (typically 2.15% for first use) adds $8,600 that can be rolled into the loan. Having some cash reserves is still recommended for closing costs and move-in expenses, typically $8,000-$12,000 total.
Strategies to Save for a Down Payment Faster
- Automate your savings. Set up a recurring transfer to a dedicated high-yield savings account on each payday. Accounts earning 4%-5% APY (as of 2026) add meaningful growth. On a $50,000 balance, 4.5% APY earns $2,250 per year.
- Direct windfalls to your fund. Tax refunds (average $3,167 per the IRS), bonuses, gifts, and side income should go directly into your down payment account rather than being absorbed into general spending.
- Reduce housing costs temporarily. Moving to a cheaper apartment, getting a roommate, or living with family can free up $500-$1,500/month that dramatically shortens your savings timeline.
- Look into down payment assistance programs. Over 2,000 programs exist nationwide offering grants, forgivable loans, or matched savings for qualifying buyers. Check DownPaymentResource.com for options in your area.
- Budget an emergency fund separately. Keep 3-6 months of expenses in a separate account. Lenders want to see that your down payment savings are not your only reserves.
Frequently Asked Questions
How much down payment do I need for a house?
The minimum down payment depends on your loan type. Conventional loans require 3%-5%, FHA loans require 3.5% (with a 580+ credit score), and VA and USDA loans allow 0% down for qualifying borrowers. The traditional 20% target eliminates private mortgage insurance, which costs 0.5%-1.5% of the loan amount annually. For a $350,000 home, 20% is $70,000, while 3.5% FHA is only $12,250 -- but the smaller down payment means higher monthly payments and mandatory mortgage insurance.
How long does it take to save for a down payment?
The timeline depends entirely on your target amount, existing savings, and monthly contribution rate. For a $350,000 home with 20% down ($70,000), saving $1,000 per month from zero takes about 70 months (nearly 6 years). Saving $2,000 per month cuts it to 35 months. Starting with $20,000 already saved and contributing $1,500 per month brings it down to about 33 months. The median time for first-time buyers to save for a down payment is approximately 4-7 years according to NAR data.
Should I put 20% down on a house?
Putting 20% down eliminates PMI, gives you immediate equity, and results in lower monthly payments. However, it is not always the optimal financial decision. If waiting to save 20% means paying rising rent for 5+ additional years while home prices appreciate, a smaller down payment with PMI may build wealth faster. For a $350,000 home, PMI on a 5% down conventional loan costs roughly $150-$200/month and can be removed once you reach 20% equity. Run the numbers for both scenarios using our Mortgage Calculator.
Where should I keep my down payment savings?
A high-yield savings account (HYSA) is the best option for down payment savings. As of 2026, many online banks offer 4%-5% APY with FDIC insurance up to $250,000. Money market accounts and short-term CDs (6-12 months) are also appropriate. Avoid investing your down payment in stocks, crypto, or other volatile assets -- you need the money at a specific time and cannot afford a market downturn. A $50,000 balance in a 4.5% HYSA earns approximately $2,250 per year in interest.
What are closing costs and how much should I budget?
Closing costs are fees paid at the time of purchase beyond the down payment, including lender origination fees, appraisal ($400-$600), title insurance, attorney fees, prepaid taxes, and homeowner's insurance. According to the CFPB, closing costs typically total 2%-5% of the purchase price. For a $350,000 home, budget $7,000-$17,500 in closing costs. Some of these costs can be negotiated with the seller or rolled into the loan in certain programs. Always request a Loan Estimate from your lender to see exact figures before committing.
Are there programs that help with down payments?
Yes, over 2,000 down payment assistance (DPA) programs exist across the United States. These include state and local government grants, forgivable second mortgages, matched savings programs, and employer-assisted housing benefits. FHA, VA, and USDA loans already offer low or no down payment options. Many first-time buyer programs offer $5,000-$25,000 in assistance. Eligibility depends on income, location, credit score, and first-time buyer status. Check with your state housing finance agency or visit DownPaymentResource.com to find programs in your area.