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Down Payment 🆓 Free PMI Savings

Down Payment Calculator

Enter a home price and your target down payment to instantly see your loan amount, monthly payment, PMI cost and cancellation date, and how long it will take to save. The Scenarios tab shows every option from 3% to 30% down side by side - so you can see the exact monthly payment and total interest at each level before you decide.

Down Payment Calculator

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Savings Plan

️ Disclaimer: Estimates only. Actual loan requirements depend on lender, credit score, and market conditions.

Down Payment Scenarios

Compare all common down payment options for your home price. Run the calculator first.

Down % Down Amount Loan Amount Monthly P&I Monthly PMI Total Monthly Total Interest
Run the calculator first.

PMI estimated at 0.75% of loan per year. Highlighted row = your selected down payment.

How Down Payment Works

What is a Down Payment?

Down Payment = Home Price − Loan Amount Down Payment % = Down Payment / Home Price The down payment is your upfront equity in the home. It reduces your loan amount, monthly payment and total interest paid over the life of the loan.

Minimum Down Payments by Loan Type

Conventional: 3% minimum (5% common) 20% avoids PMI entirely FHA Loan: 3.5% (credit score 580+) 10% (credit score 500-579) VA Loan: 0% (eligible veterans/military) USDA Loan: 0% (eligible rural areas) Jumbo Loan: 10-20% (varies by lender) Note: Higher down = better rate in most cases.

PMI - Private Mortgage Insurance

Required when: Down payment less than 20% Annual cost: 0.5% to 1.5% of loan amount Monthly PMI = Loan Amount x PMI Rate / 12 Example: $360,000 loan at 0.75% PMI Monthly PMI = $360,000 x 0.75% / 12 = $225/month PMI Cancellation: Auto-cancel: When LTV reaches 78% of original value Request cancel: At 80% LTV with good payment history FHA MIP: Required for life of loan if down < 10%

Savings Goal Timeline

Monthly savings needed to reach goal in N months: S = (Goal - CurrentSavings) / N (simplified, no interest) With compound interest (monthly): Future Value = P(1+r)^n + PMT x [(1+r)^n - 1] / r Where: P = current savings r = monthly rate (APY/12) n = months PMT = monthly contribution

20% vs Lower Down: The True Tradeoff

$450,000 home example: 5% Down 20% Down Down Payment: $22,500 $90,000 Loan Amount: $427,500 $360,000 Monthly P&I: $2,773 $2,337 (6.75%, 30yr) Monthly PMI: $267 $0 Total Monthly: $3,040 $2,337 PMI Duration: ~7.5 years None Total PMI paid: ~$24,030 $0 Putting more down saves ~$703/month initially. But $67,500 extra invested at 7% = $134K in 10 years.

Frequently Asked Questions

The minimum depends on your loan type. Conventional: 3% minimum (standard is 5%). FHA: 3.5% with 580+ credit score, 10% with 500–579. VA: 0% for eligible veterans and active military. USDA: 0% for eligible rural and suburban areas. Jumbo loans: typically 10–20%. While the minimum gets you in the door, 20% is the key threshold because it eliminates PMI - Private Mortgage Insurance that adds $50–$300+/month to your payment. The more you put down, the lower your monthly payment, the less interest you pay over the loan life, and the better rate you typically qualify for.
PMI (Private Mortgage Insurance) protects the lender if you default. It's required on conventional loans when down payment is below 20%. Cost: typically 0.5% to 1.5% of the loan amount per year. Under the Homeowners Protection Act: PMI automatically cancels when your loan balance reaches 78% of the original purchase price (per your original amortisation schedule). You can request cancellation at 80% LTV with a good payment history. FHA MIP (their version of PMI) works differently - if you put less than 10% down on an FHA loan, MIP stays for the life of the loan.
Neither answer is universally right. The case for 20%: eliminates PMI, reduces monthly payment, lower total interest, immediate equity buffer. The case for less: in appreciating markets, getting in sooner means your equity benefits from rising values; preserving cash for emergency repairs (experts recommend 1–3% of home value in liquid reserves); opportunity cost - the extra money invested may outgrow the PMI cost. Run the Scenarios tab to see the exact monthly and total costs at each down payment level, then factor in your local market appreciation and investment alternatives.
LTV (Loan-to-Value ratio) = Loan Amount ÷ Home Value. A 20% down payment gives you an 80% LTV. Lower LTV is better: lenders see it as less risk because there's more equity cushion if property values fall. At 80% LTV, you avoid PMI on conventional loans. At 75% or below, you often qualify for better rate pricing. At 95%+ (5% down), you typically pay a higher rate AND PMI. Your LTV improves over time as your balance decreases and if your home's value increases.
Yes - most loan programs allow down payment gifts from family members. Conventional loans: 100% gift is allowed if LTV is 80% or less; for higher LTV, you typically need at least 5% from your own funds. FHA: full gift funds are allowed from family, employers, and some non-profits. VA and USDA: gift funds are generally allowed. All loan programs require a 'gift letter' from the donor stating the money is a gift, not a loan, and that no repayment is expected. The donor may also need to provide bank statements showing the funds.
Many state housing finance agencies (HFAs), local governments, and nonprofits offer down payment assistance (DPA) for first-time buyers and low-to-moderate income households. Types include: grants (free money, no repayment), forgivable loans (forgiven after a certain number of years living in the home), deferred loans (repaid only when you sell or refinance), and second mortgages at reduced rates. Notable programs: State HFA programs in all 50 states, USDA Rural Development grants, Good Neighbor Next Door (30–50% price reduction for teachers, first responders, etc.). Check your state's HFA website for current programs.
Both are mortgage insurance, but they work differently. Conventional PMI: paid only when down payment is below 20%, cancellable at 80% LTV, costs 0.5–1.5% annually depending on credit and LTV. FHA MIP: required on ALL FHA loans regardless of down payment size, plus an upfront MIP of 1.75% at closing. If down payment is under 10%: annual MIP of 0.55% stays for the life of the loan. If down payment is 10% or more: MIP is removed after 11 years. The only way to remove FHA MIP on a under 10% down loan is to refinance into a conventional loan once you have 20% equity.
Use accounts that protect against loss and offer competitive yield - not investment accounts. Best options: high-yield savings accounts (FDIC-insured, 4–5% APY, fully liquid), money market accounts (similar yields, FDIC-insured), Treasury bills (4–5% yield, government-backed, no state income tax on interest), or short-term CDs (lock in a rate for 6–18 months). Avoid stocks and equity funds for money you need within 1–3 years - a market downturn right before your home purchase could devastate your savings target. The calculator uses compound interest to project your savings timeline at any APY you enter.

Min Down by Loan Type

Conventional3–5%
No PMI threshold20%
FHA (580+ score)3.5%
FHA (500-579)10%
VA Loan0%
USDA Loan0%
Jumbo Loan10–20%
Typical PMI rate0.5–1.5%/yr

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Down Payment Calculator - Everything First-Time Home Buyers Need to Know

The down payment is usually the biggest single financial hurdle in the home-buying process - but many first-time buyers don't fully understand how different down payment sizes affect their monthly costs, total interest, and PMI obligations. This calculator makes every tradeoff visible: you can see exactly what each option costs on a monthly and lifetime basis before you decide how much to put down.

Real example - $450,000 home at 6.75% for 30 years: 5% down ($22,500) = $2,773/month P&I + $267/month PMI = $3,040 total. 20% down ($90,000) = $2,337/month P&I, no PMI. Monthly difference: $703. But you need $67,500 more upfront. That extra $67,500 takes approximately 45 months to save at $1,500/month. During those 45 months, the 5% buyer would pay about $12,000 in PMI - but they'd already be in their home, building equity.

Down Payment Requirements by Loan Type

The required minimum down payment varies significantly by loan program. Understanding your options changes what's possible:

Conventional Loans

  • Minimum: 3% for first-time buyers (HomeReady, Home Possible)
  • Typical minimum: 5% for standard conventional
  • PMI threshold: 20% (below 20% triggers PMI)
  • PMI cancellable: Yes, at 80% LTV
  • Best rates start at: 20% down (but 5-10% is very common)
  • Credit score: 620+ required (740+ for best rates)

Government-Backed Loans

  • FHA: 3.5% (580+ score), 10% (500-579). MIP required for life of loan if down < 10%
  • VA: 0% for eligible veterans, active duty, surviving spouses. No PMI ever.
  • USDA: 0% for eligible rural/suburban areas. Income limits apply. Guarantee fee instead of PMI
  • Jumbo loans: Typically 10–20% minimum, varies by lender

PMI - What It Costs, When It Ends, and How to Avoid It

Private Mortgage Insurance (PMI) is one of the most misunderstood costs in homeownership. It protects the lender - not you - in case you default, but you pay for it. The cost is typically 0.5% to 1.5% of the loan amount per year, most commonly around 0.75–1% for borrowers with good credit.

PMI rules under the Homeowners Protection Act (1998):

  • Automatic cancellation: The lender must cancel PMI when your loan balance reaches 78% of the original purchase price - based on your original amortisation schedule, regardless of actual home value changes
  • Requested cancellation: You can request cancellation when your balance reaches 80% LTV, with a good payment history and no second liens
  • Midpoint cancellation: PMI must be cancelled at the midpoint of your loan term even if 78% LTV hasn't been reached
  • FHA MIP: Different rules - if you put down less than 10%, MIP stays for the life of the loan (requires refinancing to a conventional loan to remove it)

To eliminate PMI on a conventional loan immediately: put 20% or more down. To remove it sooner after purchase: make extra principal payments to accelerate reaching 80% LTV, then formally request cancellation.

The 20% Down Dilemma - Is Waiting Really Worth It?

The conventional wisdom to "save 20% before buying" made much more sense when home price appreciation was modest and savings rates were competitive. In markets with strong appreciation, waiting to save 20% can mean the target price keeps moving upward faster than you can save.

Consider both sides of this decision honestly:

  • Case for 20%: Eliminates PMI, reduces monthly payment by $100–$300+, often qualifies for slightly better rate, provides immediate equity cushion against value fluctuations, lower total interest over loan life
  • Case for less: Get into a home sooner (important in appreciating markets), preserve cash reserves for repairs and emergencies (experts recommend 1–3% of home value in liquid reserves), opportunity cost - the extra savings invested may outperform the PMI cost
  • The actual math: On a $450,000 home, the PMI cost of ~$24,000 over 7.5 years at 5% down must be weighed against: (1) potential home value appreciation on your equity during those 45 months you'd be waiting to save, and (2) what $67,500 invested at 7% annual return for 10 years would become (~$132,000)

Neither answer is universally correct. The Scenarios tab shows the exact monthly and total costs at each down payment level - use those numbers alongside your local market conditions to make the right decision for your situation.

Building Your Down Payment Savings Plan

The best accounts for parking down payment savings combine safety (no investment risk on money you need within a few years) with competitive yield. As of 2025-26, high-yield savings accounts (HYSAs) and CDs are offering 4–5% APY - meaningfully better than traditional bank savings. Consider:

  • High-yield savings accounts: FDIC-insured, liquid, competitive rates. Best for near-term goals (1–3 years). No lock-in period.
  • Money market accounts: Similar to HYSAs, often with slightly higher yields for larger balances. Some check-writing privileges.
  • Treasury bills (T-bills): Government-backed, very safe, 4–5% yield. 4, 13, 26, or 52-week terms. Slightly less liquid than a savings account but yields are competitive and federally tax-advantaged (no state income tax on interest).
  • Short-term CDs: Lock in a rate for 6–18 months. Good if you have a fixed timeline. Penalty for early withdrawal.
  • Avoid: Investing down payment savings in stocks or equity funds. The risk of a 20-30% drawdown right before your planned purchase date is not worth the potential extra gain.

How this calculator works, and where the numbers come from

The Down Payment Calculator applies the standard formula for this calculation to the values you enter and updates the result as you type. The calculation itself happens in your browser, and the page explains the method so you can check any result by hand.

Please note: Results are estimates. Lender terms, local taxes and fees vary, so confirm figures with your lender or a qualified adviser.

Sources and further reading

Learn more

Read our guide: How EMI Is Calculated, With a Full Worked Loan Example

Last reviewed: by the CalcQube Editorial Team. See our editorial policy for how we build and check calculators, or report an error.