Down Payment Calculator
Estimate your home down payment and monthly mortgage cost in seconds.
What is a Down Payment?
A down payment is the upfront cash you pay when buying a home. It’s a percentage of the purchase price that you pay immediately, while the rest is financed through a mortgage. Lenders require a down payment to reduce their risk and ensure you have immediate equity in the property.
Typical Down Payment Requirements
- Conventional Loans: As low as 3% for first-time buyers. Putting down 20% avoids Private Mortgage Insurance (PMI).
- FHA Loans: Minimum 3.5% with a credit score of 580 or higher.
- VA Loans: 0% down payment for eligible veterans, active-duty service members, and some spouses.
- USDA Loans: 0% down payment for homes in eligible rural areas.
How to Save for a Down Payment
Saving for a down payment is one of the biggest hurdles for homebuyers. Use these strategies to reach your goal faster:
- Set a specific target amount with this down payment calculator.
- Automate monthly transfers into a high-yield savings account.
- Research down payment assistance programs in your state.
- Consider side income or reducing discretionary spending temporarily.
- Ask about employer programs or gift funds from family.
Frequently Asked Questions
How much down payment do I need to buy a house?
While 20% is the common recommendation to avoid PMI, many loan programs require as little as 3%, 3.5%, or even 0% for qualified buyers. The right amount depends on your loan type, credit profile, and financial goals.
What is PMI and how does my down payment affect it?
Private Mortgage Insurance (PMI) is required on conventional loans when the down payment is less than 20%. It protects the lender if you default. PMI typically costs 0.5%–1% of the original loan amount per year. A higher down payment eliminates this extra monthly cost.
Can I use gift money for my down payment?
Yes, most mortgage programs allow down payment gifts from relatives, close friends, or even employers. You’ll need a gift letter and documentation showing the transfer. FHA and conventional loans have clear guidelines for gift funds.
