Down Payment Calculator

This down payment calculator answers the question three ways, and each one sits in its own box above. Start with the cash you have saved to get the home price it supports. Start with a home price to get the cash you need at closing. Or enter both to see what percentage down that works out to and whether it clears the 20% mark. Every version also returns the loan amount and the monthly payment, and closing costs are included by default at 3% of the price.

What a down payment is

A down payment is the share of a purchase price you pay in cash upfront, with the rest borrowed. On a $250,000 home, 3.5% down is $8,750 and 20% down is $50,000. Whatever you do not put down becomes the mortgage: price minus down payment equals loan amount, every time. Down payments show up on expensive purchases where lenders want the buyer to carry part of the risk, mainly homes and cars, and on a home the figure is almost always quoted as a percentage rather than a dollar amount.

Closing costs and the rest of the cash you need

Closing costs typically run 2% to 5% of the purchase price on top of the down payment, which is $5,000 to $12,500 on a $250,000 home. This calculator uses 3% by default and you can change it or switch it off. The down payment is the biggest cheque you write at closing, but it is not the only one.

The rest goes to the loan and the paperwork behind it: discount points if you buy the rate down, the lender's origination fee, an appraisal, lender's title insurance, a title search, recording fees, a home inspection, and a survey where one is required. Prepaid items are also collected at the table, including the first year of homeowners insurance and several months of property tax into escrow. Miss these in your planning and a down payment you thought was covered comes up short by five figures. The Mortgage Calculator prices the payment those numbers produce, and the House Affordability Calculator checks the price against your income and debts.

How much lenders require

The minimum depends entirely on the loan program, and it ranges from nothing to 20%.

Conventional loans follow the standards set by Fannie Mae and Freddie Mac, the two government-sponsored buyers of mortgages. Twenty percent is the traditional figure, but lenders routinely write conventional loans at 10%, 5%, and as little as 3% for qualified buyers. Anything under 20% brings private mortgage insurance, a monthly charge that protects the lender and does nothing for you. PMI comes off once the balance drops to 80% of the original value if you ask, and the servicer must cancel it automatically at 78%.

FHA loans, insured by the Federal Housing Administration under HUD, allow 3.5% down with a credit score of 580 or higher, and 10% down for scores between 500 and 579. The trade is mortgage insurance on both ends: an upfront premium of 1.75% of the loan amount at closing, plus an annual premium charged monthly. With less than 10% down that annual premium lasts the full term, and the usual way out is refinancing into a conventional loan once you hold 20% equity. The FHA Loan Calculator handles both premiums, and the Refinance Calculator shows what the switch would cost.

VA loans for eligible service members, veterans, and surviving spouses require no down payment and charge no monthly mortgage insurance. Instead there is a one-time funding fee, roughly 1.25% to 3.3% of the loan depending on service category and whether you have used the benefit before, waived for borrowers with a service-connected disability rating. Putting 5% or 10% down lowers the fee. See the VA Mortgage Calculator for the exact tiers.

USDA loans also allow zero down for buyers in eligible rural and some suburban areas, subject to household income limits, with a 1% upfront guarantee fee and a 0.35% annual fee.

A bigger down payment against a smaller one

Twenty percent down is the line worth knowing. It removes PMI on a conventional loan, usually earns a better rate because the lender's risk is lower, and cuts the balance you pay interest on. On a $400,000 home at 6.5% over 30 years, moving from 10% down to 20% down drops the loan from $360,000 to $320,000 and the payment by about $253 a month, before the PMI saving.

Small down payments have their own logic. The obvious gain is getting into a house years earlier instead of renting while you save, and in a market where prices are climbing faster than you can save, waiting costs money too. Cash kept back is also cash still available: for repairs the house needs in year one, for an emergency fund, for paying off a credit card at 22%, or for retirement contributions that carry an employer match. Every dollar locked into home equity is a dollar you cannot easily reach without borrowing it back through a refinance or a home equity line.

There is a risk on the large side that people rarely price in. Equity is not insulated from the market. If values fall 10% after you close, the loss lands on your stake first, and a 20% down payment absorbs it before the lender feels anything. Lenders prefer big down payments for exactly that reason, and because a buyer with real money in the deal has more to lose from walking away, which makes default less likely.

Where down payment money comes from

• Savings. Most buyers get there by setting money aside over several years. Cash you will need within a few years belongs somewhere safe and liquid, such as a high-yield savings account or a CD timed to mature near your purchase date, rather than in stocks, where a bad quarter can cost you the house. Our Savings Calculator and CD Calculator project both.
• A piggyback second mortgage. An 80-10-10 splits the purchase into a first mortgage for 80% of the price, a second loan for 10%, and 10% cash from you. It sidesteps PMI and can keep the first loan under the conforming limit so you avoid jumbo pricing. The second loan carries a higher rate, so compare the total cost against simply paying PMI.
• Assistance programs. Cities, counties, state housing finance agencies, and some charitable foundations offer grants and forgivable second loans to first-time buyers, with the state-level list published on HUD's website. Most are need-based, limited to a primary residence, and still require decent credit and documented income. Read the repayment terms, since many are forgiven only if you stay several years and become due if you sell early.
• Gift funds. Family can give you the money, and on an FHA loan the entire down payment may be a gift. Lenders require a signed gift letter stating the money is a gift with no repayment expected, and they will want to trace the deposit.
• An IRA withdrawal. Roth contributions can be withdrawn any time without tax or penalty. On top of that, both Roth and traditional IRAs allow a first-time buyer to take out $10,000 free of the 10% early-withdrawal penalty, and two spouses can each use their own $10,000. It is a lifetime limit, the funds must be used within 120 days, and on a traditional IRA the withdrawal is still taxed as income.
• A 401(k) loan. Most plans let you borrow the lesser of $50,000 or half your vested balance, with no tax or penalty as long as you repay it. You pay the interest back to your own account, but repayment usually has to finish within five years, the payments count against you when the lender calculates your debt-to-income ratio, and the borrowed money stops compounding while it is out. Our 401k Calculator shows what that pause costs long term.

How long saving a down payment takes

Saving 20% on a $400,000 home means putting away $80,000, which takes 8 years at $833 a month or 4 years at $1,667 a month before any interest. Park it in an account paying 4% and the 8-year version arrives about 10 months early. Those numbers are why so many buyers use a 5% or 10% program instead: 5% down on the same house is $20,000, roughly two years of saving at $833 a month.

Two things shorten the timeline more than raising the monthly amount. The first is buying at a lower price, since every requirement on this page scales with the price. The second is a program that lowers the requirement itself, such as an FHA loan at 3.5% or a state assistance grant. Set a target with the three calculators above, then work backward from your monthly saving to a realistic date and hold the money somewhere it cannot lose value before you need it.

Down payments on cars and other purchases

Cars use the same idea with different numbers. A common guideline is 20% down on a new vehicle and 10% on a used one, mainly because a new car loses value quickly and a thin down payment leaves you owing more than the car is worth within a year. Unlike a mortgage, no insurance product exists to cover the lender, so the down payment and the loan term carry all of it. The Auto Loan Calculator prices that trade-off.

How to use the three calculators above

The first box works backward from your savings. Enter the cash you have, the percentage you plan to put down, and the closing costs, and it solves for the price you can cover, since your cash has to stretch across both. Change the down payment percentage to see the trade directly: with $100,000 saved and 3% closing costs, 20% down supports a $434,783 house, while 3.5% down supports $1,538,462 at nearly four times the monthly payment.

The second box runs forward from a price you have in mind and returns the cash you need at closing, split into down payment and closing costs. The third takes a price and your available cash, subtracts the closing costs, and reports what is left as a percentage of the price, along with whether that clears 20% and avoids PMI. All three use the interest rate and term you enter to price the monthly payment, so you can watch the payment move as you shift the down payment up or down.