Down Payment Calculator
Calculate your down payment, loan amount, and monthly payment with PMI. Compare 5%, 10%, 20% scenarios side by side.
Your down payment plan
| Down % | Down $ | Loan $ | Monthly P&I | PMI / mo | Total / mo | PMI? |
|---|---|---|---|---|---|---|
| 5% | $20,000 | $380,000 | $2,528.15 | $316.67 | $3,344.82 | Yes |
| 10% | $40,000 | $360,000 | $2,395.09 | $300.00 | $3,195.09 | Yes |
| 15% | $60,000 | $340,000 | $2,262.03 | $283.33 | $3,045.36 | Yes |
| 20% | $80,000 | $320,000 | $2,128.97 | — | $2,628.97 | No |
| 25% | $100,000 | $300,000 | $1,995.91 | — | $2,495.91 | No |
| 30% | $120,000 | $280,000 | $1,862.85 | — | $2,362.85 | No |
| Buyer / loan type | Typical down payment | Notes |
|---|---|---|
| First-time buyers (NAR median) | ~6% | Usually FHA or Conventional 97 |
| Repeat buyers (NAR median) | ~17% | Often funded by prior home equity |
| FHA minimum | 3.5% | 580+ credit; MIP often life-of-loan |
| VA minimum | 0% | Eligible service members; no PMI |
| Conventional minimum | 3-5% | PMI until 22% equity; drops off |
How much should you put down?
The classic guidance is the 20% rule: put down 20% of the purchase price to avoid Private Mortgage Insurance (PMI), secure better rates, and start with meaningful equity in the home. On a $400,000 home, that means $80,000 at closing — a serious sum, and the reason most first-time buyers don't hit it.
Reality is more nuanced. According to the National Association of Realtors, first-time buyers in the US put down a median of about 6%, while repeat buyers average closer to 17%. The 20% rule is a useful target, not a hard floor — many successful homeowners bought with less and built equity through appreciation and principal payments over time.
A larger down payment makes sense when you have stable income, an emergency fund already in place, and no high-interest debt. It lowers your monthly payment, eliminates PMI, reduces total interest paid, and gives you a cushion if home prices dip. A smaller down payment makes sense when you're renting in an expensive market, when waiting longer means missing appreciation, or when you can invest the difference at a higher expected return than your mortgage rate.
Why 20% matters: PMI
Private Mortgage Insurance protects the lenderif you default — you pay for it, but you receive nothing in return. PMI typically costs 0.5% to 1.5% of the original loan amount per year, billed monthly. On a $360,000 loan with 1% PMI, that's $3,600 per year, or $300 per month — pure overhead.
On Conventional loans, PMI kicks in any time your down payment is less than 20% (loan-to-value above 80%). The good news: under the federal Homeowners Protection Act, lenders must cancel PMI automatically when your loan balance reaches 78% of the original purchase price. You can also request removal at 80% LTV. Once you cross that line — through principal payments, appreciation, or a combination — PMI disappears for good.
FHA loans use a different system called MIP (Mortgage Insurance Premium). With less than 10% down, MIP lasts the life of the loan and only ends when you refinance or sell. With 10% or more down, MIP drops off after 11 years. This is the single biggest reason borrowers who could qualify Conventional often prefer it: PMI is temporary, MIP often is not.
Low-down-payment options
If you don't have 20%, you have plenty of company — and plenty of options. Each program has trade-offs around credit, mortgage insurance, and eligibility.
- VA loans (0% down) — for eligible active-duty service members, veterans, and surviving spouses. No PMI, competitive rates, and a one-time funding fee (1.25%-3.3% of loan, financeable). The best deal in the market if you qualify.
- FHA loans (3.5% down) — open to most buyers with credit scores of 580+. 10% down is required for scores between 500 and 579. MIP is the catch: it usually lasts the life of the loan unless you put down 10%.
- Conventional 97 (3% down) — Fannie Mae and Freddie Mac programs allow 3% down for first-time buyers with 620+ credit. PMI applies but drops off automatically at 22% equity.
- Conventional 95 (5% down) — standard low-down option for repeat buyers. Same PMI rules as Conventional 97.
- USDA loans (0% down) — for eligible rural and some suburban areas, with income limits. Includes an upfront and annual guarantee fee.
The trade-off: opportunity cost
Every dollar you put toward a down payment is a dollar that isn't invested in stocks, bonds, or your retirement account. The right move depends on the comparison between your mortgage rate and your expected investment return.
Concrete example: imagine you have $80,000. Option A puts it all down on a $400,000 home (20%, no PMI) at 7%. Option B puts $40,000 down (10%, with PMI) and invests the other $40,000 in a diversified index fund expected to return 8% long-term.
- Option A saves the PMI premium (around $150-$300/month for years) and reduces interest cost.
- Option B grows the $40,000 to roughly $86,000 in 10 years at 8%, but pays PMI until reaching 22% equity (often 5-8 years).
Use our Investment Calculator to model the growth side. The math often favors investing when mortgage rates are below 5%, and often favors putting more down when rates are above 7% — but personal risk tolerance and emergency-fund status matter as much as the spread.
Closing costs (don't forget)
Closing costs are paid in addition to the down payment and typically run 2% to 5% of the home price. On a $400,000 home, expect $8,000 to $20,000 in closing costs at signing — on top of the down payment itself. Skipping over closing costs is one of the most common budgeting mistakes new buyers make.
- Loan origination fee — typically 0.5% to 1% of the loan amount.
- Appraisal — $400 to $700, paid up front.
- Title insurance and title search — varies by state, often $1,000-$3,000.
- Recording fees and transfer taxes — set by your county/state.
- Prepaid property tax and homeowners insurance — typically 6-12 months upfront, held in escrow.
- Inspection — $300-$600, paid before closing.
Some closing costs are negotiable. Ask the seller for concessions (especially in buyer's markets), shop around for title insurance, and compare loan estimates from at least three lenders — total fees can vary by thousands.
Saving for a down payment
Saving 20% of a $400,000 home means $80,000 — plus another $10,000-$20,000 for closing costs and reserves. For most buyers that's a multi-year project. A few proven strategies:
- Automate savings into a high-yield account. A dedicated HYSA earning 4-5% keeps your funds liquid and growing modestly. Direct-deposit a fixed amount each pay period so the money is gone before you can spend it.
- Use targeted accounts. First-time homebuyer accounts exist in some states with tax benefits. Roth IRA contributions can be withdrawn tax-free for a first home (up to $10,000 of earnings tax-free under specific rules).
- Cut your two biggest variable costs first. Rent and transportation typically dwarf everything else. A roommate or downgrading a vehicle can free up $500-$1,500/month — accelerating your timeline by years.
- Look at down payment assistance programs. Most states and many cities offer grants or low-interest second mortgages for first-time and moderate-income buyers. These can knock $5,000-$25,000 off what you need to bring to closing.
- Don't over-optimize for 20%. If home prices in your market are appreciating faster than you can save, waiting for 20% may cost more than buying earlier with PMI. Run the numbers both ways with our Mortgage Calculator and decide based on real cash flow.
Once you have a target, use our Loan Calculator to understand the amortization side and our Investment Calculator to compare investing the savings versus accelerating the down payment.