Does down payment include closing costs?

No. Your down payment is the initial equity you pay directly toward the home purchase price. Closing costs are separate administrative, lender, title, and escrow fees that typically equal 2% to 5% of the total purchase price, requiring extra cash at closing.

How does a larger down payment affect my monthly mortgage payment?

A larger down payment lowers your total borrowed loan amount, reduces lifetime interest charges, lowers your mandatory monthly principal and interest payment, and completely removes monthly private mortgage insurance once you reach 20% equity.

Down Payment Calculator

Q: Do I really need 20% down to buy a house?

No. While 20% down eliminates Private Mortgage Insurance (PMI), qualified first-time homebuyers can purchase a home with as little as 3% down on conventional loans, 3.5% down on FHA loans, and 0% down on VA or USDA loans.

Q: What is PMI and how much does it cost?

Private Mortgage Insurance (PMI) is an insurance policy that protects the lender if you default on your mortgage. It is typically required on conventional loans when you put down less than 20%. PMI usually ranges from 0.4% to 1.5% of your total loan balance annually, adding roughly $100 to $300 to your monthly mortgage payment.

Q: Where should I keep my down payment savings?

Down payment funds intended for home purchase within 1 to 5 years should generally be kept in low-risk, liquid cash instruments such as High-Yield Savings Accounts (HYSAs), money market accounts, or short-term Certificates of Deposit (CDs) to avoid stock market volatility.

Calculate your required upfront home purchase down payment across conventional, FHA, and zero-down loans, compare monthly PMI costs, and find your exact savings timeline.

Select Currency:

Home Purchase Price

The estimated or contract purchase price of the property.

Down Payment Percentage

Down Payment Cash Amount

Entering a dollar amount automatically syncs the percentage above.

Current Savings Earmarked

Cash currently in your bank or high-yield savings account.

Monthly Savings Contribution

How much money you can set aside each month toward your down payment.

Total Down Payment Required

$70,000

20.0% of $350,000 purchase price

Loan Amount

$280,000

80.0% Loan-to-Value (LTV)

Savings Shortfall

$55,000

Remaining cash needed

Time to Reach Goal

55 Months

≈ 4 yrs 7 mos at current rate

✓ Zero Private Mortgage Insurance (PMI) Required Putting 20% down eliminates monthly PMI charges entirely, saving you an estimated $140 to $235 per month compared to low-down-payment loans.

Loan Program	Minimum Down	Down Payment Cash	Estimated Monthly PMI	Status

How to Use This Calculator

Enter your target home price: Type the expected market value or contract purchase price of the home you plan to buy.
Choose or customize your down payment percentage: Click any of the common loan presets (3% First-Time, 3.5% FHA, 5% Conventional, 10%, or 20% No PMI) or type an exact cash dollar amount.
Add your savings baseline and monthly contribution: Input how much cash you already have saved and how much you can deposit into savings each month.
Review your timeline and PMI impact: Inspect your exact savings gap, projected debt-free savings timeline, and check whether your down payment triggers private mortgage insurance.

All calculations run 100% locally in your browser with zero data tracking. Experiment freely with different down payment levels and monthly savings goals to find your ideal homebuying schedule.

The Formula

The down payment represents the initial equity contributed directly by the buyer at closing, with the remaining balance financed through a mortgage lender.

Down Payment Amount = Home Purchase Price × (Down Payment Percentage ÷ 100) Mortgage Loan Amount = Home Purchase Price - Down Payment Amount Savings Gap = Maximum(0, Down Payment Amount - Current Savings) Months to Goal = Ceil(Savings Gap ÷ Monthly Savings Contribution)

Where:

Home Purchase Price: The agreed transaction price between buyer and seller before transaction fees.
Down Payment Percentage: The percentage of purchase price funded with personal cash (conventional minimum: 3%–5%; FHA minimum: 3.5%; conventional PMI threshold: 20%).
Loan Amount: The principal balance borrowed from the mortgage lender, determining your monthly mortgage payment.
Monthly Savings Contribution: The regular monthly surplus transferred into cash reserves or a high-yield savings vehicle.

Example: Saving for a $350,000 Home

Suppose you are shopping for a home priced at $350,000. You currently have $15,000 saved and can comfortably contribute $1,000/month toward your down payment fund.

Scenario A: 20% Down Payment ($70,000)
Down payment = $350,000 × 0.20 = $70,000. Your loan amount is $280,000. You need an additional $55,000 ($70,000 − $15,000). At $1,000/month, you will reach your goal in 55 months (4.6 years) and pay $0 in PMI.
Scenario B: 5% Down Payment ($17,500)
Down payment = $350,000 × 0.05 = $17,500. Your loan amount is $332,500. You need only $2,500 more ($17,500 − $15,000), which takes only 3 months to reach. However, you will pay approximately $140 to $190/month in PMI until you accumulate 20% equity.
Scenario C: 3.5% FHA Loan ($12,250)
Down payment = $350,000 × 0.035 = $12,250. Because you already have $15,000 saved, your down payment is 100% funded today with a $2,750 cash surplus left over for closing costs.

Frequently Asked Questions

Do I really need 20% down to buy a house?

No. While putting 20% down eliminates Private Mortgage Insurance (PMI) and lowers your monthly payment, qualified buyers can purchase homes with as little as 3% down on conventional loans, 3.5% on FHA loans, and 0% down on VA or USDA loans.

What is PMI and how much does it cost?

Private Mortgage Insurance protects the lender against loss if a borrower defaults. It is required on conventional mortgages when the down payment is under 20%. PMI typically costs between 0.4% and 1.5% of the loan amount annually, which equates to roughly $100 to $250 per month on an average home loan.

Does my down payment include closing costs?

No. Your down payment goes entirely toward paying for the property itself. Closing costs are separate lender, title, escrow, and government recording fees that generally total 2% to 5% of your purchase price and must be paid in addition to your down payment.

Where should I keep my down payment savings?

If you plan to buy within 1 to 5 years, keep your funds in a high-yield savings account (HYSA), money market fund, or short-term Certificates of Deposit (CDs). These accounts provide liquid, guaranteed returns without subjecting your down payment to stock market swings.

Can I use gift funds for my down payment?

Yes. Conventional and FHA guidelines allow buyers to use gift money from immediate family members to cover all or part of their down payment, provided the donor signs a formal gift letter confirming the funds do not require repayment.