Down Payment Calculator
| Down % | Down Amount | Loan Amount | Monthly P&I | Est. PMI/mo |
|---|---|---|---|---|
| 5% | $20,000.00 | $380,000.00 | $2,477.32 | $237.50 |
| 10% | $40,000.00 | $360,000.00 | $2,346.93 | $225.00 |
| 15% | $60,000.00 | $340,000.00 | $2,216.55 | $212.50 |
| 20% | $80,000.00 | $320,000.00 | $2,086.16 | None |
How Much Down Payment Do You Need?
A down payment is the upfront cash payment you make when purchasing a home — the portion of the purchase price not covered by your mortgage. It is expressed as a percentage of the home's purchase price.
Down Payment = Home Price × Down Payment %
Loan Amount = Home Price − Down Payment
Down Payment Scenarios on a $400,000 Home
| Down % | Down Amount | Loan Amount | PMI Required? |
|---|---|---|---|
| 3% | $12,000 | $388,000 | Yes |
| 5% | $20,000 | $380,000 | Yes |
| 10% | $40,000 | $360,000 | Yes |
| 15% | $60,000 | $340,000 | Yes |
| 20% | $80,000 | $320,000 | No |
| 25% | $100,000 | $300,000 | No |
How a Larger Down Payment Affects Monthly Payments
On a $400,000 home with a 7.0% interest rate, 30-year fixed mortgage:
| Down % | Monthly P+I | Est. PMI | Total Monthly |
|---|---|---|---|
| 5% ($20K) | $2,529 | ~$285 | ~$2,814 |
| 10% ($40K) | $2,396 | ~$225 | ~$2,621 |
| 20% ($80K) | $2,129 | $0 | $2,129 |
A 20% vs. 5% down payment saves $685/month in this example — $285 in PMI elimination plus $400 in lower mortgage payments from the smaller loan balance. Over 5 years, that's $41,100 in savings.
PMI — What It Is and How to Avoid It
Private Mortgage Insurance (PMI) protects the lender (not you) in case you default on the loan. It is required by conventional lenders when your down payment is less than 20% — in other words, when your loan-to-value ratio exceeds 80%.
PMI Cost Range
PMI is typically 0.5%–1.5% of the original loan amount per year, paid monthly as part of your mortgage payment. On a $360,000 loan (10% down on a $400K home):
How to Eliminate PMI
- Wait for automatic cancellation: Under the Homeowners Protection Act, PMI must be automatically canceled when your loan balance reaches 78% of the original purchase price (based on your amortization schedule), as long as payments are current.
- Request cancellation at 80% LTV: You can request PMI removal once your balance reaches 80% of the original value. The lender may require a new appraisal.
- Refinance: If your home has appreciated and you now have 20%+ equity, refinancing eliminates PMI (though you'll pay closing costs, typically 2–3% of loan).
- Use an 80-10-10 "piggyback" loan: Put 10% down, get an 80% first mortgage, and take a 10% second mortgage (HELOC or second mortgage). No PMI, but the second mortgage typically carries a higher rate.
Down Payment by Loan Type
Conventional Loans
Backed by Fannie Mae or Freddie Mac. The minimum down payment is 3% for first-time buyers (HomeReady or Home Possible programs) or 5% for repeat buyers. Credit score requirements are typically 620 minimum, with better rates for 740+. Loan limits for 2025 are $806,500 for most areas (higher in high-cost areas up to $1,209,750).
FHA Loans
Backed by the Federal Housing Administration. Minimum 3.5% down with a 580+ credit score, or 10% down with a 500–579 score. FHA loans have both an upfront mortgage insurance premium (1.75% of loan, typically rolled into the loan) and an annual MIP (0.45%–1.05% depending on loan term and LTV). Unlike PMI, FHA MIP cannot be automatically canceled on most loans made after 2013 — you must refinance into a conventional loan to remove it.
VA Loans
Available to eligible veterans, active duty service members, and surviving spouses. Zero down payment required, no PMI, competitive rates. A one-time VA funding fee (typically 2.15% for first use with no down payment, less with a down payment) applies but can be rolled into the loan. Disabled veterans may be exempt from the funding fee. VA loans are generally the best available mortgage for those who qualify.
USDA Loans
Available for rural and some suburban properties for buyers within income limits (typically 115% of area median income). Zero down payment required. USDA loans have an upfront guarantee fee (1% of loan amount) and annual fee (0.35% of remaining balance). Not all rural-looking areas qualify — check the USDA's eligibility map online.
Down Payment Requirements Comparison
| Loan Type | Min. Down Payment | Min. Credit Score | PMI/Insurance |
|---|---|---|---|
| Conventional | 3–5% | 620 | PMI until 20% equity |
| FHA | 3.5% | 580 | MIP for loan life (usually) |
| VA | 0% | No minimum (lender varies) | Funding fee (one-time) |
| USDA | 0% | 640 (recommended) | Guarantee fee (annual) |
How Long to Save for a Down Payment
The time to save depends on your target down payment amount and your monthly savings capacity. If you're saving a fixed amount each month in an interest-bearing account:
Months to Save = Down Payment ÷ Monthly Savings
To accelerate your timeline, consider a high-yield savings account (currently 4–5% APY in 2025), automate transfers to a dedicated down payment account the day you're paid, and research first-time buyer grants and assistance programs in your state.
Frequently Asked Questions
Can I buy a house with less than 20% down?
Yes. Most loan programs allow down payments well below 20%. Conventional loans allow as little as 3% down (though PMI is required until you reach 20% equity). FHA loans require 3.5% down with a 580+ credit score (or 10% with 500–579). VA loans allow 0% down for eligible veterans. USDA loans allow 0% down for qualifying rural properties. The tradeoff for lower down payments is PMI, higher monthly payments, and in some cases, a higher interest rate.
How much does PMI cost?
Private Mortgage Insurance (PMI) typically costs 0.5–1.5% of your loan amount per year, paid monthly. On a $400,000 loan, PMI might cost $2,000–$6,000 per year ($167–$500/month). The exact rate depends on your loan-to-value ratio, credit score, and lender. PMI is automatically canceled when your loan balance reaches 78% of the original purchase price (under the Homeowners Protection Act). You can also request cancellation at 80% LTV if your payments are current.
Is it better to put 20% down or invest the difference?
This is a genuine financial debate. The 20% argument: avoid PMI, lower monthly payment, lower interest rate, more equity from day one. The invest-instead argument: if stocks historically return 7–10% annually and your mortgage rate is 6.5–7%, keeping money in the market may outperform (especially in tax-advantaged accounts). The real answer depends on your local market, risk tolerance, PMI cost, and how long you plan to stay. Run the numbers with your specific figures — the "right" answer varies by situation.
What other costs should I budget for besides the down payment?
The down payment is just the start. Also budget for: closing costs (2–5% of the purchase price, typically $8,000–$20,000 on a $400,000 home), a home inspection ($300–$500), appraisal ($400–$600), moving costs ($1,000–$5,000), immediate repairs or updates, and 3–6 months of mortgage payments in emergency savings. First-time buyers frequently underestimate closing costs — ask your lender for a Loan Estimate within 3 days of application, which must itemize all costs.
What down payment assistance programs are available?
Many states, cities, and counties offer down payment assistance (DPA) programs, typically for first-time buyers or those under income limits. These come in several forms: grants (free money, no repayment), deferred loans (repaid only when you sell or refinance), and second mortgages at low interest. The National Council of State Housing Agencies (NCSHA) maintains a database of programs by state. HUD-approved housing counselors (free service) can help you identify programs available in your area.
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