Down Payment Calculator
Calculate your down payment amount and see how it affects your loan, monthly payment, and PMI requirements. Find out if you need 20% down or can buy with less.
Quick select:
How Much Should You Put Down on a House?
The traditional advice is to put down 20% to avoid PMI (Private Mortgage Insurance), but that's not always the best choice for everyone. Many successful homebuyers put down less than 20% and still build wealth through homeownership. The key is understanding the trade-offs and choosing what works for your financial situation.
Down Payment Options by Loan Type
Minimum: 3-5% down
PMI required if less than 20% down. Best for buyers with good credit (680+) who can't put down 20% but want conventional financing.
Minimum: 3.5% down
Requires mortgage insurance for life of loan (or until you refinance). Best for first-time buyers with lower credit scores (580+).
Minimum: 0% down
No PMI required. Available to veterans, active military, and eligible spouses. One of the best loan programs available.
Minimum: 0% down
For rural and suburban properties. Income limits apply. Great option for buyers in eligible areas.
Pros and Cons of Different Down Payment Amounts
3-5% Down
Pros:
- • Buy sooner, don't wait years to save
- • Keep cash for emergencies and repairs
- • Start building equity immediately
Cons:
- • Higher monthly payment
- • PMI required (adds $100-$300/month)
- • More interest paid over loan term
10-15% Down
Pros:
- • Lower monthly payment than 3-5%
- • Still keep some cash reserves
- • Better loan terms than minimum down
Cons:
- • Still requires PMI
- • Takes longer to save up
- • Miss out on market appreciation while saving
20%+ Down
Pros:
- • No PMI (saves $100-$300/month)
- • Lowest monthly payment
- • Better interest rates
- • More equity from day one
Cons:
- • Takes years to save
- • Ties up large amount of cash
- • Opportunity cost (could invest elsewhere)
- • Miss market appreciation while saving
Understanding PMI (Private Mortgage Insurance)
PMI protects the lender (not you) if you default on your loan. It typically costs 0.5-1% of the loan amount annually, or about $100-$300 per month on a $400,000 loan.
Ways to Avoid or Remove PMI:
- • Put down 20% or more
- • Use a piggyback loan (80-10-10 structure)
- • Choose lender-paid PMI (slightly higher rate, no monthly PMI)
- • Request PMI removal once you reach 20% equity (for conventional loans)
- • Refinance once you have 20% equity
How to Save for a Down Payment
Saving for a down payment can feel overwhelming, but with a plan, it's achievable. Here are proven strategies:
- •Set a specific goal: Calculate exactly how much you need and by when
- •Automate savings: Set up automatic transfers to a high-yield savings account
- •Cut expenses: Reduce dining out, subscriptions, and discretionary spending
- •Increase income: Side hustles, freelancing, or asking for a raise
- •Use windfalls: Tax refunds, bonuses, and gifts go straight to savings
- •Down payment assistance: Many states and cities offer programs for first-time buyers
- •Family gifts: Parents or relatives can gift money (up to $18,000/year per person tax-free)
Frequently Asked Questions
How much should I put down on a house?
The traditional recommendation is 20% to avoid PMI (Private Mortgage Insurance), but many buyers put down less. FHA loans require as little as 3.5% down, and conventional loans can go as low as 3%. A larger down payment reduces your monthly payment and total interest paid, but don't drain your emergency fund.
What is PMI and how can I avoid it?
PMI (Private Mortgage Insurance) protects the lender if you default on your loan. It typically costs 0.5-1% of the loan amount annually. You can avoid PMI by putting down 20% or more, using a piggyback loan (80-10-10), or choosing a lender-paid mortgage insurance (LPMI) option with a slightly higher interest rate.
Can I buy a house with less than 20% down?
Yes! Many loan programs require less than 20% down: FHA loans (3.5%), VA loans (0% for veterans), USDA loans (0% for rural properties), and conventional loans (3-5%). You'll pay PMI with less than 20% down on conventional loans, but it may be worth it to buy sooner rather than waiting years to save 20%.
How do I save for a down payment?
Start by setting a specific savings goal and timeline. Automate transfers to a high-yield savings account. Cut unnecessary expenses and redirect that money to savings. Consider down payment assistance programs, gifts from family, or first-time homebuyer programs. Some employers offer homebuyer assistance as a benefit.