Down Payment Calculator
It works out the down payment a home price requires, the loan and loan-to-value it leaves behind, whether PMI applies, and how long saving for it will take.
Down payment needed
$40,000
Down payment
$40,000
Loan amount
$360,000
Loan-to-value
90.0%
Still to save
$25,000
Months to target
20
20% would be
$80,000
At 90.0% LTV this loan carries private mortgage insurance. Reaching 20% down would need a further $40,000.
Remember closing costs are due in cash on top of the down payment, and keep an emergency fund intact rather than putting every dollar into the deposit.
What it calculates
It works out the down payment a home price requires, the loan and loan-to-value it leaves behind, whether PMI applies, and how long saving for it will take.
Why it matters
The down payment decides the loan size, the interest rate offered, and whether mortgage insurance is charged — three costs that follow you for years.
Who it's for
First-time buyers setting a savings target, and anyone weighing a smaller deposit now against avoiding PMI later.
Formula
- P
- Home price
- d
- Down payment percentage
- LTV
- Loan-to-value, which is 100% − d
- PMT
- Amount saved each month toward the target
Worked example
$300,000 home at 10% down, saving $1,000 a month
- 1Target = 300,000 × 10% = $30,000
- 2With $10,000 saved, the shortfall is $20,000
- 3At $1,000 a month with no return, that is 20 months
$30,000 needed, about 20 months away
How the down payment calculator works
The down payment sets the loan-to-value ratio, and LTV is what lenders actually price against. Below 20% down, conventional loans add private mortgage insurance until the balance falls to 80% of value. Conventional loans can start as low as 3% down, so the real question is rarely whether you can buy but what the smaller deposit costs in rate and insurance. Where a saving plan is modelled, the target is the future value of both your existing balance and each monthly deposit, so a return shortens the timeline more than the deposits alone suggest.
The down payment sets the loan-to-value ratio, and LTV is what lenders actually price against. Below 20% down, conventional loans add mortgage insurance until the balance falls to 80% of value.
Conventional loans can start as low as 3% down, so the real question is rarely whether you can buy but what a smaller deposit costs in rate and insurance.
Common mistakes
- Assuming 20% is a requirement rather than the point at which PMI stops.
- Draining every reserve into the deposit and closing with no emergency fund.
- Forgetting closing costs, which are due in cash on top of the down payment.
- Ignoring that a larger deposit often unlocks a better interest rate as well.
Tips and best practice
- Compare the monthly cost of PMI against the extra months of saving to reach 20%.
- Check state and local first-time buyer assistance programs before assuming you are short.
- Keep the deposit somewhere safe if the purchase is within about three years.
Frequently asked questions
How much down payment do I need for a house?
Conventional loans can start around 3%, FHA at 3.5%, and 20% removes private mortgage insurance entirely. The right answer depends on rate, PMI cost and your reserves.
Do I have to put 20% down?
No. Twenty percent is simply the threshold above which private mortgage insurance is not charged. Many buyers put down far less and pay PMI for a few years.
What is loan-to-value?
The loan as a percentage of the property value. A 10% down payment gives a 90% LTV, and lenders price rate and insurance against that ratio.
Is a bigger down payment always better?
Not always. It lowers the loan and may improve the rate, but cash spent on the deposit is no longer available for closing costs, repairs or an emergency fund.
How long will it take to save a down payment?
The shortfall divided by what you save each month, shortened by any return earned on the balance along the way. The calculator solves for that directly.
Related calculators
Methodology & trust
- Formula source
- Fannie Mae and FHA loan-to-value guidelines
- Last updated
- 2026-07-28
- Privacy
- Every calculation runs in your browser. No inputs are sent to a server or stored.