Down Payment Calculator

What you need in cash to buy a home

The down payment is the part of the price you pay yourself; the mortgage covers the rest. But it is not the only cash a purchase takes. Closing costs — lender fees, title and settlement charges, recording fees, prepaid items — are due at the same time. The Consumer Financial Protection Bureau describes the Loan Estimate’s Estimated Cash to Close as your down payment and closing costs, minus any deposit already paid and any seller credits.

This calculator puts those pieces together:

• Cash needed at closing — down payment plus your closing cost estimate.
• Loan amount and loan-to-value (LTV) — the loan as a share of the price, the number lenders use to set requirements and pricing.
• Whether PMI is likely — on a conventional loan, putting down less than 20% usually means paying for private mortgage insurance.
• Time to save — how many months your current savings plus a monthly amount (and any interest) take to reach the cash needed.

It does not tell you what price you can afford — the home affordability calculator does that from your income and debts. Use this one once you have a price in mind, to plan the cash.

The formulas

A down payment of d percent leaves an LTV of 100 − d percent: 10% down is a 90% LTV, 20% down an 80% LTV. PMI is flagged as likely when the LTV is above 80%.

The time to save is found month by month:

m

monthly interest rate equivalent to the savings APY: (1 + APY)^(1/12) − 1

balance

starts at what you have saved so far; interest is rounded to the cent each month

The count stops at the first month the balance reaches the cash needed. With no interest this is simply the gap divided by the monthly saving, rounded up. The same simulation drives the savings calculator.

Worked example

You want a $400,000 home with 10% down and estimate closing costs at 3% of the price. You have $30,000 saved, add $1,000 a month and earn 4% APY.

1. Down payment: $400,000 × 10% = $40,000
2. Closing costs: $400,000 × 3% = $12,000
3. Cash needed at closing: $40,000 + $12,000 = $52,000
4. Loan: $400,000 − $40,000 = $360,000, an LTV of 90% — above 80%, so a conventional loan would likely carry PMI
5. Still to save: $52,000 − $30,000 = $22,000
6. At $1,000 a month and 4% APY the balance first passes $52,000 after 20 months (1 year, 8 months): $20,000 of deposits and $2,660.94 of interest

Without the interest it would take 22 months. Putting 20% down instead would need $92,000 in cash and, on the same plan, 52 months of saving — the trade-off between saving longer and paying PMI.

Minimum down payments

The table under the calculator shows the cash needed at these published minimums. Each is the least a program allows; lenders can ask for more.

• FHA: 3.5%. The National Housing Act requires an FHA borrower to invest at least 3.5% of the property’s value. HUD allows that maximum financing only with a minimum decision credit score of 580 or higher; with a score from 500 to 579 the loan is limited to 90% of the value (10% down), and below 500 the borrower is not eligible. Mortgage insurance is required on all FHA loans.
• Fannie Mae HomeReady: 3%. Fannie Mae’s Selling Guide allows up to 97% LTV on a one-unit principal residence underwritten through its Desktop Underwriter (95% when manually underwritten), for borrowers with income up to 80% of the area median.
• 20% to avoid PMI. Private mortgage insurance is usually required on a conventional loan with less than 20% down, according to the CFPB. It can be cancelled later as you pay the loan down — see the mortgage calculator.

Other programs, such as VA and USDA loans, have their own rules and are not included here. Programs and limits change, so confirm the current terms with a lender.

Things to keep in mind

• Closing costs are your estimate. The 3% preset is only a starting point, not a typical figure: costs depend on the lender, the state, the loan and the price. Once you apply, the Loan Estimate lists them; enter that number as an amount.
• Deposits and seller credits reduce the cash due. Earnest money you have already paid and any credit the seller agrees to toward your costs come off the cash to close. Lower the closing cost figure by those amounts to reflect them.
• Keep a cushion. Moving, repairs and furnishing come right after closing, and some lenders want to see reserves left in the bank. Plan to have more than the minimum.
• A smaller down payment means a bigger loan. Every dollar not put down is borrowed and paid back with interest, and under 20% adds PMI on a conventional loan. Compare the monthly payment at each option with the mortgage calculator.

Limits of this calculator

• The home price and closing costs are held fixed while you save; in practice both can change.
• The PMI flag follows the conventional 80% LTV line only. It does not know your loan type, and FHA, VA and USDA loans have their own insurance or fees.
• Savings interest is taken before tax, at a constant APY.