Down Payment Calculator
Work out the down payment you need and how long it will take to save for it.
Written by Rahman · Last reviewed
Quick answer
Saving 20% on a $350,000 home means reaching $70,000. Starting from $12,000 and putting aside $1,000 a month at 4%, that takes 4 years 4 months; aiming at 10% instead ($35,000) takes 1 year 10 months. This calculator answers the "how long" question rather than the "how much" one. Give it the price, the percentage you're aiming for, what you've saved and what you can add each month, and it tells you how long the gap will take to close. Twenty percent is the usual point at which you avoid private mortgage insurance, which is why it's the common target.
Results are estimates for general guidance and are not financial, tax or legal advice. Except where a calculator names a currency, figures carry no currency of their own: put in pounds and you get pounds back, put in rupees and you get rupees. Figures depend on the assumptions you enter and on rates that change over time. Check current rates and speak to a qualified adviser before acting on them.
About the Down Payment Calculator
A down payment is the upfront share of a home's price you pay yourself, with the rest covered by a mortgage. A larger down payment means a smaller loan, lower monthly payments and often a better interest rate.
This calculator works out the down payment amount you need for a given home price and percentage, then estimates how long it will take to save the rest based on your current savings and monthly contributions.
Down payment = Home price × (Down payment % ÷ 100)
The time to save is found by growing your current savings plus monthly contributions until they reach that amount.
Why 20% is the number everyone cites
Twenty percent isn't a lending requirement. Plenty of loans are made well below it, but it's the point at which private mortgage insurance normally stops being required in the US. PMI protects the lender, not you, and yet you're the one who pays for it.
On a $400,000 home at 6.5%, the difference is visible in the monthly figure. Ten percent down leaves a $360,000 loan at about $2,275 principal and interest, plus roughly $225 a month of PMI. Twenty percent down leaves a $320,000 loan at about $2,023 with no PMI at all, around $475 a month less, of which about $225 is purely the insurance premium.
- PMI is typically cancellable once the loan-to-value ratio reaches about 80%, and lenders are generally required to terminate it automatically at 78% on schedule.
- Reaching 20% has its own cost: on a $400,000 home, going from 10% to 20% means finding an extra $40,000 in cash.
- Loan programmes differ. Some government-backed loans carry mortgage insurance for the life of the loan regardless of equity, which changes the calculation entirely.
A bigger deposit is not automatically better
Putting more down shrinks the loan, the payment and the total interest, and it removes PMI once you reach the threshold. But it also turns savings you can get at into home equity, which is one of the hardest assets to reach. You can only get at it by selling, refinancing or borrowing against it, and it's least available exactly when times are hard.
So it's worth being clear about the trade-off rather than assuming the biggest possible deposit is best. Someone who empties their savings to reach 20% gets rid of a monthly cost, but also gets rid of the cushion that would cover a job loss or a failed roof.
- Keep your emergency fund intact. Buying a home with nothing left in reserve is a common route into high-interest debt within the first year.
- Closing costs are separate from the deposit and typically run 2% to 5% of the loan in the US, so budget for them alongside it.
- When the mortgage rate is low relative to what savings can earn, a smaller deposit and a larger invested balance can be the stronger position: the comparison is between the mortgage rate and the after-tax return you would otherwise get.
Frequently Asked Questions
How much down payment do I need?
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It varies by country and loan type. 20% is a common benchmark that avoids extra mortgage insurance, but many loans accept less.
Why aim for a larger down payment?
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It reduces the loan amount, lowers monthly payments and total interest, and can help you secure a lower interest rate.
Should I save in an interest-bearing account?
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For a goal a few years away, a safe interest-bearing account helps your savings grow. For very short timelines, avoid volatile investments.
Does the down payment cover all upfront costs?
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No. Closing costs, legal fees, taxes and moving expenses are additional, so budget beyond the down payment itself.
Sources
- CFPB — Explore loan choices — US regulator on down payments, loan types and mortgage insurance.