Down Payment Calculator

Understanding Down Payments

Our Down Payment Calculator helps you determine how much you need to save for a home purchase and how long it will take to reach your goal. A down payment is the initial upfront portion of the total purchase price that you pay when buying a home.

What is a Down Payment?

A down payment is the portion of a home's purchase price that you pay upfront, rather than financing through a mortgage. The size of your down payment affects your monthly mortgage payments, the interest rate you receive, and whether you'll need to pay for private mortgage insurance (PMI).

Typical Down Payment Requirements

• Conventional Loans: Typically 5-20% of the home price
• FHA Loans: As low as 3.5% with a credit score of 580+
• VA Loans: 0% down for eligible veterans and service members
• USDA Loans: 0% down for eligible rural homebuyers

Benefits of a Larger Down Payment

• Lower monthly payments: A larger down payment means borrowing less money
• Better interest rates: Lenders often offer lower rates for larger down payments
• Avoid PMI: With 20% down, you can avoid private mortgage insurance
• Immediate equity: You start with more ownership in your home
• Stronger offer: Sellers may prefer buyers with larger down payments

Down Payment Strategies

• Set a savings goal: Determine how much you need and create a timeline
• Automate savings: Set up automatic transfers to a dedicated savings account
• Cut unnecessary spending and redirect those funds to savings
• Increase income: Consider side gigs or asking for a raise
• Use windfalls: Put tax refunds, bonuses, or gifts toward your down payment
• Explore assistance programs: Many states and local governments offer down payment assistance

Down Payment Assistance Programs

Many programs can help homebuyers with their down payment:

• Grants: Funds that don't need to be repaid
• Forgivable loans: Loans that are forgiven after a certain period
• Deferred-payment loans: Loans that don't require payment until you sell or refinance
• Matched savings programs: Programs that match your savings contributions
• Tax credits: Credits that reduce your tax liability

Frequently Asked Questions

Q: What is the minimum down payment for a house?
A: The minimum depends on the loan type. FHA loans require as little as 3.5%, conventional loans can go as low as 3%, and VA/USDA loans offer 0% down options for qualified borrowers.

Q: Should I put down 20% if I can?
A: While 20% helps you avoid PMI, it might not always be the best choice. Consider your overall financial picture, investment opportunities, and emergency fund needs before deciding.

Q: Can I use gifted money for a down payment?
A: Yes, most loan programs allow gift funds from family members. You'll need to provide a gift letter and documentation showing the transfer of funds.

Q: How does down payment affect my mortgage?
A: A larger down payment means a smaller loan amount, which results in lower monthly payments and less interest paid over the life of the loan.

Q: Are there programs for first-time homebuyers?
A: Yes, many states and local governments offer special programs with lower down payment requirements, grants, or favorable terms for first-time homebuyers.