How a down payment is calculated
The down payment is the part of the price you pay in cash at closing. The rest is the loan. Enter a price and a percentage to see the cash needed, the loan amount and how long it would take to save.
The formula
Down payment = home price × down payment %
Worked example
On a $400,000 home, 3% down is $12,000, 5% is $20,000, 10% is $40,000 and 20% is $80,000.
How to use this calculator
Enter the home price and the down payment you plan to make, then the amount you have saved so far and your monthly savings. The down payment calculator shows the down payment needed, the loan amount, how much you still have to save and the time to save it. The time to save depends on how much you can set aside each month, so try a few amounts to find a plan that fits your budget.
More examples: what each down payment does to the loan
This table uses the same $400,000 home. Principal and interest are worked out at an example rate of 6.5% over 30 years.
| Down payment | Cash needed | Loan amount | Monthly principal and interest |
|---|---|---|---|
| 3% | $12,000 | $388,000 | $2,452 |
| 5% | $20,000 | $380,000 | $2,402 |
| 10% | $40,000 | $360,000 | $2,275 |
| 20% | $80,000 | $320,000 | $2,023 |
Going from 3% down to 20% down lowers principal and interest by about $430 a month. It also removes private mortgage insurance on a conventional loan, which the table does not include.
How long it takes to save
Divide the down payment by what you save each month. A $20,000 down payment at $800 a month takes 25 months. A $40,000 down payment at the same pace takes 50 months. Interest earned on your savings would shorten this a little.
Minimum down payment by loan type
- Conventional: can start at 3% down.
- FHA: 3.5% with a credit score of 580 or higher, or 10% with a score of 500 to 579.
- VA: no down payment required for eligible borrowers.
- USDA: 0% down for eligible buyers and areas.
On the $400,000 example, the 3.5% FHA minimum is $14,000. Individual lenders can ask for more than the program minimum.
What changes the result
- Home price: the down payment rises in step with the price. Each extra $10,000 of price adds $500 at 5% down and $2,000 at 20% down.
- Percentage: a higher percentage means more cash now and a smaller loan and payment later.
- Monthly savings: doubling what you save each month halves the time to reach your goal.
Common mistakes
- Saving only the down payment and forgetting closing costs, which are separate.
- Using your emergency fund to reach a higher percentage.
- Waiting years to reach 20% when a smaller down payment would work for your loan type.
- Looking at the cash needed and ignoring the cost of mortgage insurance on a smaller down payment.
Related calculators
Compare low down payment options with the FHA loan calculator and the VA loan calculator. Add the fees due at closing with the closing cost calculator, and see the price your income supports with the home affordability calculator.
Frequently asked questions
Do I need 20% down?
No. Conventional loans start at 3% down, FHA loans at 3.5%, and VA and USDA loans allow 0% for eligible buyers.
What happens if I put down less than 20%?
A conventional loan will usually include private mortgage insurance until you reach 20% equity. See the PMI calculator.
Are closing costs part of the down payment?
No. Closing costs are separate, usually 2% to 5% of the loan.
What is the minimum down payment for an FHA loan?
3.5% of the price with a credit score of 580 or higher, and 10% with a score of 500 to 579. On a $400,000 home that is $14,000 or $40,000.
How long does it take to save for a down payment?
Divide the amount you need by what you save each month. Saving $1,000 a month reaches $20,000 in 20 months and $80,000 in 80 months.
Is it better to put 10% or 20% down?
On the $400,000 example, 20% down needs $40,000 more cash than 10% down. In return it lowers principal and interest by about $253 a month at 6.5% and avoids PMI on a conventional loan. The better choice depends on how much savings you would have left.