How to use this calculator
- Set the home price. Type an exact number or use the slider.
- Choose a down payment. Use the slider, a custom percentage, or a quick-select button. The payment and PMI update instantly.
- Enter your savings. Current cash plus what you can put away each month gives the timeline to your goal.
The chart and comparison table show every common down payment level side by side, including the PMI cost and total interest. Use them to weigh saving longer against buying sooner.
The real cost of a smaller down payment
- PMI - Below 20% down, lenders add private mortgage insurance, typically 0.5% to 1% of the loan per year.
- More interest - A larger loan means more interest over the term. The gap between 5% and 20% down on a $400,000 home can exceed $50,000.
- Less equity buffer - A small down payment leaves less cushion if values dip, and you may owe more than the home is worth sooner.
Waiting for 20% is not automatically right either. If rents climb while you save, the break-even can move against you. Run both paths.
Saving strategies that work
- Automate it - Move money to a separate account on payday so it never reaches your spending account.
- Use a high-yield account - Four to five percent on a down payment fund is real money on a five-figure balance.
- Cut one big expense - A $200 monthly cut adds $2,400 a year, which compounds faster than small trims.
- Direct windfalls - Tax refunds, bonuses, and gifts can move the timeline by months.
- Check assistance programs - Many states and cities offer grants or low-interest second mortgages for first-time buyers.
Frequently asked questions
Is it better to put 20% down or invest the difference?
It depends on the rate versus expected returns. A 6.5% mortgage is a guaranteed 6.5% return, which is competitive with many balanced portfolios after tax. Below 20% you also pay PMI, which raises the effective cost. Keep an emergency fund either way.
Does a bigger down payment get me a better interest rate?
Sometimes. A lower loan-to-value ratio can reduce lender risk and improve pricing, and it removes PMI at 20%. The biggest effect is on the monthly payment and total interest, not necessarily the note rate.
What other costs should I save for besides the down payment?
Closing costs usually run 2% to 5% of the price, and you need reserves for moving, furniture, and small repairs. Lenders also want to see that you have cash left after closing, so do not drain every account.
How long does it take to save for a down payment?
The calculator divides the remaining goal by your monthly savings. On a $350,000 home with 20% down and 3% closing costs, you need $80,500. Starting at $10,000 and saving $1,000 a month takes about 71 months, or roughly six years, without investment growth.
Can I buy with less than 20% down?
Yes. Conventional loans can start near 3%, FHA at 3.5%, and VA at zero for eligible buyers. Below 20% you pay mortgage insurance, but waiting years to avoid it is not always the better call if rents keep rising.
Estimates only. Closing costs, PMI pricing, and program rules vary by lender and location. Confirm figures with a loan officer and your savings plan before making an offer.
