See how much you need to save and how long it'll take to hit your down payment goal.
Free down payment planner that calculates the cash needed at closing, your PMI exposure, and a realistic month-by-month savings timeline at HYSA returns.
Direct answers to the most common questions, in plain language. Skim if you're in a hurry; dig deeper below.
Aim for 20% to avoid PMI — but 5–10% is far more common.
Twenty percent down lets you skip private mortgage insurance and gets you the best loan pricing. But the median first-time buyer puts down just 6–8%. Smaller down payments mean PMI and a bigger loan, but they let you buy years sooner.
No. Conventional loans allow 3%; FHA allows 3.5%.
Twenty percent is a guideline, not a rule. Conventional loans start at 3% down, FHA at 3.5%, and VA / USDA can go to 0%. You will pay PMI below 20%, but it falls off automatically once you reach 22% equity.
Median: 3–6 years for first-time buyers.
On a $400k home, saving 10% ($40k) at $800/month in a 4% HYSA takes about four years. Twenty percent ($80k) takes closer to seven. Increasing the monthly contribution beats chasing higher returns.
High-yield savings or short-term Treasuries.
Anything you need within 3 years stays out of the stock market. A high-yield savings account (4–5% APY in 2026), short-term Treasury bills, or a brokered CD ladder are the standard choices. Capital preservation beats yield here.
The mechanics in short answers — no jargon, no upsell.
You pay it in cash at closing. The rest is borrowed. A $400k home with 10% down means $40k in cash and a $360k mortgage.
Private mortgage insurance protects the lender, not you, and costs 0.5–1.5% of the loan per year. It falls off automatically once you reach 22% equity through payments or appreciation.
Lender fees, title insurance, appraisal, taxes, and prepaid escrows typically run 2–5% of the home price — separate from your down payment.
Money in a 4% HYSA earns interest each month, so the actual amount you need to contribute is less than the target. The longer the runway, the bigger the assist.
Designed so anyone can model their situation in under a minute, with or without a finance background.
Down payment plus closing costs plus reserves — see every dollar you need before you start house-hunting.
See how many months until you hit your goal at your current savings rate, with HYSA interest factored in.
Compare putting 10% down sooner against waiting for 20% — the PMI cost is often smaller than years of rent.
Try different monthly contributions and see exactly how each one shortens your timeline.
Bigger down payment = lower payment, but smaller emergency fund. The calculator surfaces both sides.
Turn an abstract dream into a concrete month-and-year on the calendar.
Everything you might ask before, during, or after using this tool.
Plan on your down payment plus 2–5% of the home price for closing costs plus 1–2 months of mortgage payments in reserves. On a $400k home with 10% down, that’s roughly $40k + $10k closing + $5k reserves ≈ $55k total cash.
Private mortgage insurance is a monthly premium charged on conventional loans with less than 20% down. It typically costs 0.5%–1.5% of the loan amount per year, paid monthly. On a $360k loan at 1%, that’s $300/month. PMI drops off automatically once you reach 22% equity.
Yes. Most loan programs allow gifts from immediate family for the down payment, often the full amount. You will need a signed gift letter stating it doesn’t need to be repaid. FHA allows gifts for the entire down payment; conventional usually requires the borrower to contribute some of their own funds on high-balance loans.
Anything within a 3-year horizon stays out of stocks. The standard playbook is a high-yield savings account (4–5% APY in 2026), short-term Treasury bills, or a brokered CD ladder. The goal is capital preservation, not maximum return.
It depends on rent vs. the PMI premium and on how fast home prices are moving in your market. If PMI costs $300/month and you’re paying $2,500 in rent, buying with 10% down and accepting PMI for a few years usually wins. If prices are flat and rent is cheap, saving to 20% can pay off.
Cash savings, 401(k) loans (carefully — repayment is required), Roth IRA contributions you withdraw, gifted funds, sale of investments, and bona fide grants from down-payment-assistance programs. Borrowed money from credit cards or personal loans does not count.
Typically yes. Lenders generally require 10–20% down on a second home and 15–25% on an investment property. Rates and PMI rules are also stricter than for a primary residence.
Yes — three common paths: a VA loan (no PMI for eligible veterans), a piggyback loan (80/10/10 structure that splits the loan), or lender-paid PMI (built into a higher rate). Each has trade-offs; do the math before you assume one is better than just paying PMI.
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"Put 20% down" is the most-repeated advice in personal finance, and it is mostly out of date. The median first-time buyer in the U.S. puts down 6–8% and has done so for over a decade. The 20% target is a guideline that avoids PMI and gets the best rates — it is not a rule.
The right number is the one that lets you keep three to six months of expenses in cash after closing. If 20% drains your reserves, put down less. PMI for two years is almost always cheaper than running out of money in month three.
Private mortgage insurance is a monthly premium charged on conventional loans with less than 20% down. It protects the lender from default — not you. Premiums typically run 0.5%–1.5% of the loan per year, paid monthly. On a $360k loan at 1%, that’s about $300/month.
PMI falls off automatically when your loan-to-value ratio reaches 78% (i.e., 22% equity), based on the original purchase price. You can also request removal at 80% LTV. FHA mortgage insurance (MIP) works differently — on most FHA loans it stays for the life of the loan unless you refinance.
Most loan programs let immediate family gift you part or all of the down payment. You need a gift letter — a signed statement saying the money is not a loan. FHA allows 100% gifted down payment. Conventional loans usually require the borrower to put some of their own money in on higher-balance loans.
Roth IRA contributions can be withdrawn tax- and penalty-free at any time. First-time buyers can also pull up to $10k of Roth earnings penalty-free. 401(k) loans are possible but risky — if you leave your job, the balance is often due immediately. The IRS limits 401(k) hardship withdrawals for home purchase, but they are taxed plus penalized if you are under 59½.
The rule for any goal within three years: capital preservation beats yield. The down payment fund is not the place to chase returns. If the market drops 30% the month before you close, your timeline just got destroyed.
Reasonable homes for the money: a high-yield savings account (4–5% APY in 2026), short-term Treasury bills (no state tax, fully liquid via brokerage), a brokered CD ladder, or a money-market fund. Skip stocks, crypto, real-estate-investment trusts, or anything else marketed as "growth."
Two short notes worth reading before you trust any number on this page.
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Results are not financial, legal, or tax advice. Please consult a qualified professional before any decision about your loan, investments, or personal finances. Actual loan terms and charges depend on your bank and individual circumstances.
