How much down payment do I need to buy a house?

The minimum down payment depends on the loan type. Conventional loans require as little as 3% for first-time buyers (Fannie Mae HomeReady, Freddie Mac Home Possible) or 5% for repeat buyers. FHA loans require 3.5% with a 580+ credit score. VA and USDA loans offer 0% down for qualifying borrowers. Jumbo loans typically require 10–20%. The key tradeoff: lower down payments mean lower savings requirements but add PMI (private mortgage insurance) until you reach 20% equity, which typically costs 0.5–1.5% of the loan annually.

Should I put 20% down to avoid PMI?

Putting 20% down eliminates PMI, but it is not always the optimal strategy. If a 20% down payment means waiting 3–5 more years to buy, you may miss out on home price appreciation that exceeds your PMI cost. The break-even depends on: (1) how fast home prices are rising in your market, (2) the PMI cost relative to your loan size, (3) what you would earn on the extra money if kept invested. In fast-appreciating markets, buying sooner with less down often wins financially. In flat or declining markets, 20% down is safer. Use the PMI Calculator on this site alongside this tool to model the full picture.

What is the best savings account for a down payment?

Down payment savings should be in a safe, liquid account — not invested in stocks, which can lose value right before you need the money. The best options in 2024–2025 are: high-yield savings accounts (HYSA) from online banks (typically 4–5% APY), money market accounts at credit unions or online banks (similar rates), or US Treasury bills (4–5% for short durations, fully liquid at maturity). Avoid locking money in CDs with early withdrawal penalties if your buying timeline is uncertain. The default rate of 4.5% in this calculator reflects typical HYSA rates as of mid-2025.

Can down payment money come from a gift?

Yes — most loan programs allow gift funds for the down payment, but with rules. For conventional loans, gift funds can cover the entire down payment if putting down 20% or more; for down payments below 20%, some of the funds must come from your own savings (varies by loan type). FHA loans allow 100% gift funds for the down payment. The gift must come from an eligible donor (family member, fiancé, employer, or charity) and must be documented with a gift letter stating no repayment is required. Consult your lender for the specific requirements of your loan.

Does my savings rate affect how quickly I can buy a home?

Significantly — the savings return rate has a compounding effect that grows more impactful over longer timelines. At a 0% return and $500/month savings, reaching a $30,000 goal takes 60 months. At 4.5% APY, the same $500/month reaches $30,000 in about 52 months — saving roughly 8 months. The longer your timeline, the more interest compounds. Maximizing your savings rate (without taking on investment risk) by using a HYSA or money market fund over a traditional 0.01% savings account is one of the simplest ways to accelerate your timeline.

Should I include my emergency fund in current savings?

No — your emergency fund (typically 3–6 months of expenses) should remain separate and untouched. Only count money you have specifically set aside for the down payment in the "current savings" field. Commingling emergency funds with down payment savings creates risk: if you need to tap the emergency fund, it delays your home purchase. Many buyers keep down payment savings in a separate account labeled specifically for that goal.

What other upfront costs should I save for besides the down payment?

The down payment is only part of the cash you need at closing. Also budget for: closing costs (typically 2–5% of the loan amount — use the Closing Costs Calculator on this site), home inspection ($300–$600), appraisal ($500–$800), moving costs, and an immediate repair/improvement reserve (especially for older homes). First-time buyers often underestimate these additional costs. A realistic total cash-at-closing target is down payment + 3–4% of the home price for closing costs and reserves.

Down Payment Calculator

The Down Payment Calculator shows exactly how long it will take to save your target down payment given your current savings, monthly contribution, and savings account interest rate. Whether you are targeting the traditional 20% to avoid PMI or a lower 3–5% first-time buyer down payment, this tool maps your savings timeline and shows how much interest your savings will earn along the way. Adjust the home price, down payment percentage, or monthly savings amount to find the plan that works for your timeline.

Target Home Price

Down Payment Percentage

Current Savings

Amount already saved toward this goal

Monthly Savings Contribution

Amount you add to your down payment fund each month

Savings Return Rate

HYSA or money market annual rate (check your account)

Down Payment Target

$40,000.00

Months to Goal

2 yrs, 6 mo

Current Savings Gap

$32,000.00

Interest Earned on Savings

$2,640.51

PMI Note: 20% down = $80,000.00

At 20% down, no PMI required

How to use this calculator

1
Enter the target home price
Enter the price of the home you plan to buy. If you are not sure of the exact price, use the median home price in your target area as a starting estimate.
2
Select your down payment percentage
Choose from common options (3%, 5%, 10%, 20%) or select "Custom" to enter your own percentage. A 20% down payment eliminates PMI; lower down payments are accepted by most conventional and FHA loan programs but require PMI until you reach 20% equity.
3
Enter your current savings
The amount you have already saved toward this goal. If you are starting from zero, leave this at $0. Money already saved earns interest and reduces your time to goal.
4
Enter your monthly savings contribution
How much you plan to add to your down payment fund each month. Be realistic — include only money you can consistently set aside after all other expenses.
5
Enter your savings return rate
The annual interest rate on your savings account, money market fund, or HYSA. As of 2024–2025, high-yield savings accounts and money market funds often yield 4–5% APY. Check your actual account rate.
6
Review your savings timeline
The calculator shows your target down payment amount, estimated months to goal, current gap, and interest earned on your savings. A note appears if you are already funded or if a 20% down payment would eliminate PMI.

Formula

Target Down Payment = Home Price × (Down Payment % ÷ 100)

Monthly Rate (r) = Annual Rate ÷ 100 ÷ 12

Months to Goal (n):
  If current savings ≥ target: Already funded
  Else: Simulate month-by-month:
    Each month: Balance = Balance × (1 + r) + Monthly Contribution
    n = months until Balance ≥ Target Down Payment

Interest Earned = Final Balance − (Initial Savings + Monthly Savings × n)

The calculator uses a month-by-month simulation of compound interest growth, adding your monthly contribution each period. This matches how a HYSA or money market account actually works — interest compounds monthly on the growing balance. For a home price of $400,000 with a 10% down payment target ($40,000), $8,000 already saved, $1,000/month saved, and a 4.5% APY savings rate: monthly rate = 4.5% / 12 = 0.375% per month. The simulation reaches $40,000 in approximately 30 months, during which the savings account earns roughly $700 in interest.

Worked Example

Home Price: $400,000 Down Payment: 10% = $40,000 Current Savings: $8,000 Monthly Contribution: $1,000/month Savings Return Rate: 4.5% APY Target Down Payment = $400,000 × 10% = $40,000 Savings Gap = $40,000 − $8,000 = $32,000 Month-by-month simulation (r = 0.375%/month): Month 1: $8,000 × 1.00375 + $1,000 = $9,030 Month 2: $9,030 × 1.00375 + $1,000 = $10,064 ... Month 30: Balance ≥ $40,000 ✓ Months to Goal: ~30 months (2 years, 6 months) Interest Earned: ~$700 At 10% down, PMI applies. At 20% ($80,000), no PMI required — saving an extra $32,000 takes approximately 27 additional months at this rate.

Frequently Asked Questions

Related Tools

Mortgage Calculator

Refinance Calculator

Mortgage Payoff Calculator

PMI Calculator

Mortgage Points Calculator

Bi-Weekly Mortgage Calculator