🏠Down Payment Calculator
Calculate how much house you can afford from your savings, how much cash you need for a target home, or find your down payment percentage — with closing costs and monthly payment included.
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Home Price
$434,782.61
With $100,000 available, you can afford a home priced at approximately $434,783 with a 20% down payment ($86,957) and $13,043 in closing costs. Your loan amount is $347,826 and the estimated monthly payment (PITI) is $2,752.
Monthly Payment Breakdown
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Down Payment Calculator: How Much Cash Do You Need to Buy a Home?
A down payment calculator works in three directions: given your savings, it finds the maximum home you can afford; given a home price, it finds how much cash you need at closing; given both, it calculates your down payment percentage. All three modes add closing costs to the equation to give you the real cash requirement, not just the down payment figure.
Formula: Cash at Closing = Home Price × Down% + Home Price × Closing% | Home Price = Cash ÷ (Down% + Closing%)
| Home Price | Down Payment | Closing Costs (3%) | Total Cash Needed |
|---|---|---|---|
| $350,000 | 20% ($70,000) | $10,500 | $80,500 |
| $450,000 | 10% ($45,000) | $13,500 | $58,500 |
| $600,000 | 5% ($30,000) | $18,000 | $48,000 |
Our down payment calculator solves the three most common questions first-time buyers face before entering the housing market: how much house their savings can afford, how much cash they need for a specific home, and whether their available funds produce a down payment large enough to avoid private mortgage insurance. A home down payment calculator that ignores closing costs misleads buyers into thinking their savings go further than they do — this tool shows the full picture from day one.
How Much Down Payment Do You Actually Need?
The widespread belief that you need 20% down to buy a home is a persistent myth. While 20% is optimal from a cost perspective (it eliminates PMI and reduces the loan balance), it is by no means the minimum. Different loan programs have very different down payment requirements:
Conventional loans backed by Fannie Mae and Freddie Mac allow as little as 3% down for first-time buyers (through programs like Conventional 97). FHA loans require 3.5% down for borrowers with credit scores of 580 or above, or 10% for scores between 500 and 579. VA loans (for eligible veterans and active-duty military) and USDA loans (for rural properties) require zero down payment. Jumbo loans (above the conforming loan limit, which is $766,550 in 2024 for most counties) typically require 10–20% down.
The tradeoff for putting less than 20% down is Private Mortgage Insurance (PMI), which this calculator estimates at approximately 0.5% of the loan amount annually. PMI protects the lender (not you) against default and is required until you reach 20% equity. At 0.5% annually on a $360,000 loan, PMI adds $150 per month — a real ongoing cost worth factoring into affordability calculations. PMI drops off automatically when you reach 78% LTV through scheduled amortization, or you can request cancellation at 80% LTV.
Closing Costs: The Hidden Cash Requirement Most Buyers Underestimate
Closing costs are the fees paid to complete a home purchase, separate from the down payment. They typically range from 2% to 5% of the home price and include: lender origination fees, appraisal fee, title insurance, title search fees, escrow and attorney fees, recording fees, prepaid property taxes and homeowners insurance, and prepaid mortgage interest.
The specific closing costs for any transaction depend on the state, the lender, the loan type, and the specific property. In high-tax states like New York, transfer taxes alone can add 1–2% to closing costs. In states with attorney requirements for closings (such as Massachusetts and Connecticut), legal fees are mandatory. A 3% estimate is a reasonable mid-range figure for most purchases; building in the full 5% for budgeting purposes provides a safety margin.
Lenders are required to provide a Loan Estimate (LE) within three business days of a mortgage application, which itemizes projected closing costs. At closing, the Closing Disclosure (CD) shows the final numbers, which must be within defined tolerance thresholds of the LE. Reviewing both documents carefully and asking your lender or real estate attorney to explain any charges you do not recognize is standard practice. Some closing costs (lender fees, title insurance) are negotiable or can be shopped; others (government recording fees, transfer taxes) are fixed.
20% Down Payment: The Financial Math for and Against
The financial argument for a 20% down payment rests on three pillars: eliminating PMI, reducing the loan balance and lifetime interest, and demonstrating financial readiness to lenders (which often results in better rate offers). On a $450,000 home, putting 20% down ($90,000) versus 10% down ($45,000) eliminates approximately $1,800 per year in PMI and saves roughly $90,000 in total interest over a 30-year term due to the smaller loan — a compelling numbers case for saving the full 20%.
The counter-argument is opportunity cost. The additional $45,000 held back to reach 20% rather than 10% could alternatively be invested. At a 7% annual return over 30 years, that $45,000 grows to approximately $343,000 — far exceeding the $90,000 in interest savings from the larger down payment. In markets with strong home price appreciation, the leverage effect of a smaller down payment (controlling a larger asset with less capital) can also amplify returns on the invested equity.
Neither approach is universally correct. The right down payment depends on the buyer's financial stability, the local market's price trajectory, the rate environment (high rates make PMI elimination more valuable), the buyer's risk tolerance, and whether liquidity reserves after closing are adequate for post-purchase expenses. Use our mortgage calculator to compare total lifetime costs at different down payment levels side by side.
How Lenders View Your Down Payment: LTV and Qualification
Lenders evaluate mortgage applications through the lens of risk, and the down payment is one of the most important risk signals they observe. A higher down payment means a lower loan-to-value (LTV) ratio, which means less exposure for the lender if the borrower defaults and the property needs to be sold. LTV is calculated as the loan amount divided by the appraised property value, expressed as a percentage.
An 80% LTV (20% down payment) is the standard threshold below which most conventional lenders consider a mortgage low-risk and do not require PMI. From 80% to 95% LTV, PMI applies. Above 95% LTV (less than 5% down), most conventional loan programs do not apply; FHA becomes the primary option. At 97% LTV (3% down), only Conventional 97 and FHA 3.5% programs are widely available, and both carry additional costs (PMI or FHA mortgage insurance premium).
The LTV ratio also affects your interest rate in a significant way. Conventional loans use "loan-level price adjustments" (LLPAs) that add fractions of a percent to the rate for LTVs above 80%, for lower credit scores, and for certain property types. Reaching 80% LTV (through down payment, price negotiation, or a combination) often triggers a meaningful rate improvement in addition to eliminating PMI. Use this calculator alongside our mortgage affordability calculator to find the down payment level that optimizes both the monthly payment and the long-term cost of your purchase.
Frequently Asked Questions
How much down payment is required to buy a house?
Minimum down payment requirements vary by loan type: conventional loans require as little as 3% (first-time buyers) or 5% (repeat buyers); FHA loans require 3.5% (credit score 580+) or 10% (credit score 500–579); VA and USDA loans require 0% down for eligible borrowers. Jumbo loans typically require 10–20%. While 20% is the threshold for avoiding PMI, it is not a universal requirement. Many first-time buyers successfully purchase with 5–10% down and eliminate PMI once they reach 20% equity through payments and appreciation.
What are typical closing costs when buying a home?
Closing costs typically range from 2% to 5% of the purchase price. On a $400,000 home, that is $8,000–$20,000. Major components include lender origination fees (0.5–1%), appraisal ($400–$750), title insurance (0.5–1%), title search and settlement fees ($500–$1,500), prepaid property taxes and insurance (1–2 months upfront), prepaid mortgage interest (depends on closing date), and government recording fees ($100–$400). Some costs vary significantly by state. Your lender is required to provide a Loan Estimate within 3 days of application.
What is PMI and when can I remove it?
PMI (Private Mortgage Insurance) is insurance the lender requires when your down payment is less than 20%, protecting them if you default. It typically costs 0.2%–1.0% of the loan amount annually (often around 0.5%), added to your monthly payment. PMI cancels automatically when your loan balance reaches 78% of the original home value through scheduled payments. You can request cancellation once you reach 80% LTV — either through payments or if the home has appreciated significantly. Refinancing is another way to eliminate PMI once you have sufficient equity.
Should I put 20% down or use the money elsewhere?
The 20% down decision involves a tradeoff between eliminating PMI (saves roughly $100–$200/month on a $350,000 loan), reducing total interest, and the opportunity cost of that capital. If your alternative investments can reliably return more than your mortgage rate (likely for long-term equity investments), keeping liquidity and putting less down has mathematical merit. If the extra cash would sit in a low-yield savings account, using it for a larger down payment is more efficient. However, maintaining a cash reserve after closing (3–6 months of expenses) is critical — undercapitalizing yourself to reach 20% down is a common mistake.
What income do I need to afford a house?
The standard guideline is that your total monthly housing costs (PITI — principal, interest, taxes, insurance, plus HOA and PMI if applicable) should not exceed 28% of your gross monthly income. Your total debt payments (housing + car loans + student loans + credit cards) should not exceed 36–43% depending on the loan program. If the total monthly payment this calculator shows is $2,500, the 28% rule implies a gross monthly income of $8,929 ($107,150 annually). This calculator's "Recommended Annual Income" output shows this threshold directly for your specific scenario.