About the Down Payment Calculator
A down payment calculator helps you figure out how much you need to save before buying a home, what loan amount your savings translate into, and how down payment size affects monthly cost. The headline answer — "how much do I need to put down?" — varies by loan program from 0% (VA, USDA) to 20%+ (jumbo), and the size of the down payment dramatically changes the lifetime cost of the loan.
Down payment minimums by loan type
Conventional loans typically require 3–5% down for first-time buyers (5–20% otherwise). FHA loans require as little as 3.5% with a 580+ credit score. VA loans, for eligible veterans and service members, allow 0% down. USDA loans for qualifying rural areas also allow 0% down. Jumbo loans (above the conforming limit) typically require 10–20%+, with the strictest underwriting.
The often-cited "20% down" benchmark isn't a regulatory minimum — it's the threshold above which conventional loans avoid private mortgage insurance. Below 20%, you can still buy; you just pay PMI on a conventional loan or MIP on FHA. The required minimum is much lower than 20% on most programs.
How down payment size changes the math
On a $400,000 home at a 7% rate, the difference between 5% down ($20,000) and 20% down ($80,000) is roughly $400/month — combining the smaller loan amount and the elimination of PMI. Over 30 years, that's $144,000 in saved monthly cost on the higher down payment.
But the $60,000 difference in down payment is real money that could otherwise be invested or kept liquid. At a 7% real return invested, $60,000 grows to $456,000 over 30 years. The pure math is closer to a wash than the monthly-cost framing suggests — especially once tax-deductibility of mortgage interest is factored in for itemizers.
When to put down less (and when to put down more)
Put down less when: you'd be draining your emergency fund or retirement contributions to reach 20%, you have higher-return investment opportunities, the alternative is delaying a purchase by years in a market where prices and rates are rising faster than you're saving, or you're early in your career with strong income growth ahead.
Put down more when: you're already past the 20% threshold and the marginal cost of more down is just opportunity cost, you'll have minimal cash reserves either way (lenders prefer reserves), you're a borderline approval that needs a stronger application, or interest rates are high and the guaranteed "return" on debt avoidance beats your expected investment return.
Don't drain the emergency fund. Lenders look favorably on "reserves" (mortgage payments held in cash after closing). Buyers who close with $0 in the bank are far more likely to fall into trouble in the first year — a job loss, medical bill, or major repair becomes credit-card debt at 22% APR.
Down payment assistance programs
Many state housing finance agencies offer down payment assistance — second mortgages, grants, deferred loans, or forgivable loans — to first-time buyers below certain income thresholds. These can be combined with FHA, VA, USDA, or conventional loans. The terms vary widely; some require repayment only on sale or refinance, some are forgiven over time, some are full grants.
Eligibility is usually income-limited and often tied to first-time buyer status (often defined as not having owned a primary residence in the last three years). Don't assume you don't qualify — programs often have higher income limits than buyers expect, and some target professionals (teachers, firefighters, healthcare workers) with more generous terms.
Worked examples
Building a down payment with consistent saving
Goal: $40,000 in 5 years. Required savings: $625/month at 0%, $580/month at 4.5% APY (HYSA), $522/month at 8% (taxable brokerage, riskier with a 5-year horizon). The HYSA is the best fit — modest yield without market risk on a near-term goal.
5% vs. 20% down on $400,000 home
5% ($20,000): loan $380,000, monthly P&I at 7% ≈ $2,528, plus PMI ~$190/month = $2,718. 20% ($80,000): loan $320,000, monthly P&I ≈ $2,129, no PMI. Monthly difference: $589. The $60,000 difference in down payment, invested at 7% real for 30 years, grows to ~$456,000.
FHA vs. conventional with low down payment
$300,000 home. FHA at 3.5% down: loan ~$295,000 (with UFMIP), monthly P&I + MIP ≈ $2,045. Conventional at 5% down with PMI: loan $285,000, monthly P&I + PMI ≈ $1,966. Conventional saves ~$80/month for borrowers with credit scores above ~720; FHA can win for lower scores.
Frequently asked questions
How much do I need to put down on a house?
Minimums vary: 3% on some conventional loans, 3.5% on FHA, 0% on VA and USDA, 10–20%+ on jumbo. Putting down 20% on a conventional loan avoids PMI, which is meaningful but not always optimal — preserving cash reserves and not draining retirement accounts often matters more.
Should I put down 20% to avoid PMI?
Sometimes. If reaching 20% means waiting years in a rising market, draining your emergency fund, or skipping retirement contributions during peak compounding years, the answer is usually no — pay PMI now and remove it later (it cancels at 80% LTV by request, 78% automatically on conventional loans). If reaching 20% is comfortable from existing savings, the savings on PMI typically pay off.
Where should I keep my down payment savings?
For purchases within 1–3 years, an FDIC-insured high-yield savings account, money market account, or short-term Treasuries. Avoid stocks for near-term down payments — a 30% market decline 6 months before closing can permanently delay the purchase. Beyond 5 years, a conservative balanced portfolio can fit.
Can I use gift money for the down payment?
Usually yes, with documentation. Most loan programs accept gifts from family for the down payment; lenders require a gift letter stating the funds aren't a loan, and a paper trail of the transfer. FHA is particularly accommodating; conventional loans on primary residences also generally allow gifted down payments.
Is a 5% or 10% down payment too low?
Not by underwriting standards — both are standard offerings. The cost is PMI (or MIP on FHA) and a slightly higher rate at lower LTVs. The financial trade-off depends on what you'd otherwise do with the cash. For buyers with strong income growth and no other high-priority uses for the cash, 5–10% is often a reasonable choice.
What's a piggyback loan?
An 80/10/10 (or 80/15/5) structure: a first mortgage at 80% LTV (avoiding PMI) plus a second mortgage at 10–15% LTV plus a 5–10% down payment. Common in the early 2000s, less common now. Can save on PMI but typically at a higher rate on the second mortgage and added closing costs — run the all-in cost before assuming it wins.