Down Payment Calculator
Your target down payment amount, whether it triggers PMI, and how much to save each month to get there.
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$3,889/mo
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Last updated: August 6, 2026 · Reviewed by the DoCalc team
What Is a Down Payment?
A down payment is the upfront cash you put toward a home purchase, with the rest financed through a mortgage. It's the single biggest lever in the entire home-buying math: it determines your loan amount, whether you'll pay for mortgage insurance, and how much equity you start with on day one. This calculator turns a target percentage into a concrete savings plan — how much you need, what's left after your current savings, and how much to set aside each month to close the gap.
The Formula
The first line converts a percentage goal into a dollar target. The second spreads whatever's left to save evenly across your timeframe — a straightforward budgeting split, not accounting for any interest your savings might earn along the way.
Worked Example
A $400,000 target home, 20% down payment goal, $10,000 already saved, 18 months to save:
At exactly 20% down, this scenario avoids PMI entirely and results in a $320,000 loan amount. Dropping the target to 10% down would roughly halve the monthly savings target to around $1,944/mo — but would also add PMI and a larger loan amount, worth weighing against the faster savings timeline.
How Down Payment Size Changes the Whole Picture
| Down payment | Loan amount | PMI? |
|---|---|---|
| 3.5% (typical FHA minimum) | 96.5% of price | Yes — FHA's own MIP |
| 10% | 90% of price | Usually yes |
| 20% | 80% of price | No |
| 25%+ | 75% or less | No, plus often better rate tiers |
Who Should Use This Calculator
Use it if you have a target home price in mind and want a concrete monthly savings number to work toward, rather than an open-ended "save as much as possible" goal.
Adjust your target if a 20% goal makes your timeline unrealistic — a smaller down payment with PMI is often still the financially sound choice if it gets you into a home years sooner, especially in a rising price market.
Common Mistakes to Avoid
The most common mistake is saving only for the down payment and forgetting closing costs, which typically add another 2-5% of the loan amount — a $320,000 loan could mean $6,000-$16,000 in additional cash needed at closing, on top of the down payment itself. A second mistake is depleting all savings for a bigger down payment with nothing left for moving costs, immediate repairs, or an emergency fund — lenders and financial advisors generally recommend keeping some cash reserve even after closing.
Worth knowing: down payment gifts from family are allowed on most loan types with a signed gift letter, and many states offer down payment assistance programs for first-time buyers — both can meaningfully shrink the number this calculator asks you to save yourself.
Expert Recommendation
Before locking in a 20%-down target purely to avoid PMI, run the math both ways: PMI is often a modest monthly cost (roughly 0.5-1% of the loan annually) that cancels once you hit 20% equity anyway — buying sooner with a smaller down payment can be the better call if home prices in your market are rising faster than you can save.
Frequently Asked Questions
How much down payment do I need?
Conventional loans often allow as little as 3-5% down, FHA loans allow 3.5%, and VA/USDA loans can allow 0% for eligible borrowers. 20% is the traditional benchmark mainly because it avoids private mortgage insurance (PMI), not because it's required.
What happens if I put down less than 20%?
On most conventional loans, a down payment under 20% triggers private mortgage insurance (PMI), an added monthly cost that protects the lender. PMI typically cancels automatically once you reach 22% equity.
Is a bigger down payment always better?
Not necessarily. A larger down payment lowers your monthly payment and avoids PMI, but it also ties up cash that could otherwise fund an emergency fund, cover closing costs, or be invested. The right size depends on your full financial picture, not just the mortgage.
Can down payment money be a gift?
Yes, on most loan types, with a signed gift letter confirming the funds don't need to be repaid. Lenders may still require documentation showing the source of the gift funds.
Does closing costs count as part of the down payment?
No — closing costs (typically 2-5% of the loan amount) are a separate expense on top of the down payment. Budget for both when setting a total savings target.
Should I use a down payment assistance program?
Many states and cities offer down payment assistance grants or low-interest loans for eligible first-time buyers. They can meaningfully lower how much you need to save upfront — worth researching before assuming you need the full amount from savings alone.
How does down payment size affect my loan amount?
Loan amount = home price minus down payment. A larger down payment directly and proportionally lowers your loan amount, which lowers both your monthly payment and the total interest you'll pay over the loan's life.
Conclusion
A down payment target is only useful once it's a monthly number you can actually act on. Turning a percentage goal into a concrete savings plan — and checking whether PMI applies — makes the difference between an abstract goal and a plan you can follow.