Down Payment Calculator

Calculate how much you need for a down payment based on your home price and loan type. Understand minimum requirements, PMI implications, and how different down payment amounts affect your monthly mortgage payment.

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Different loan types have different down payment requirements and eligibility criteria.

Down Payment Summary

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Understanding Down Payments

What is a Down Payment?

A down payment is the upfront cash payment you make when purchasing a home. It's expressed as a percentage of the home's purchase price. The remaining amount is financed through your mortgage loan. A larger down payment reduces the amount you need to borrow and can lead to better loan terms.

Why 20% Matters

The 20% down payment threshold is significant because it typically allows you to avoid Private Mortgage Insurance (PMI). PMI is an additional monthly cost that protects the lender if you default on your loan. Once you reach 20% equity in your home, you can usually request to have PMI removed.

Conventional Loans

Conventional loans are not backed by the government and typically require a minimum down payment of 3% to 5%. However, putting down less than 20% will require PMI. These loans often have stricter credit requirements but offer competitive interest rates for qualified borrowers.

FHA Loans

FHA loans are insured by the Federal Housing Administration and require a minimum down payment of 3.5% with a credit score of 580 or higher. They're popular with first-time homebuyers due to more flexible credit requirements, but require mortgage insurance premiums (MIP) regardless of down payment amount.

VA Loans

VA loans are available to eligible veterans, active-duty service members, and surviving spouses. They offer 0% down payment options and don't require PMI, making them one of the most attractive loan options for those who qualify. VA loans also typically have competitive interest rates.

USDA Loans

USDA loans are designed for rural and suburban homebuyers and offer 0% down payment options. To qualify, you must meet income requirements and purchase a home in a USDA-eligible area. These loans don't require PMI but do have an annual guarantee fee similar to mortgage insurance.

Down Payment Strategies

  • Save Aggressively: Set up automatic transfers to a dedicated down payment savings account. Even small amounts add up over time.
  • First-Time Buyer Programs: Many states and cities offer down payment assistance programs for first-time homebuyers. Research what's available in your area.
  • Gift Funds: Many loan programs allow you to use gift money from family members for your down payment. Check with your lender about requirements.
  • Balance Safety and Speed: While saving for 20% down eliminates PMI, don't wait so long that home prices rise faster than you can save.
  • Consider Closing Costs: Remember you'll also need 2-5% of the home price for closing costs. Don't use all your savings for the down payment.