How the Down Payment Calculator Works
Enter your target home price, the down payment percentage you are aiming for, your current savings, and how much you can save each month. The calculator instantly shows your target down payment amount, how much you still need to save, and the number of months until you hit your goal.
If you enable the optional savings interest rate field, the calculator applies compound growth to your balance each month — useful if you are keeping your savings in a high-yield savings account (HYSA) or investing them in a conservative portfolio. With no interest rate entered, the math is simple: gap divided by monthly savings.
The tier breakdown table compares four standard down payment thresholds — 3%, 5%, 10%, and 20% — so you can see exactly what each milestone requires and how much sooner (or later) you could reach it.
Down Payment Tiers: 3%, 5%, 10%, and 20%
The down payment tier you choose affects your loan type eligibility, monthly payment, and whether you pay PMI. Here is how the most common tiers compare:
| Down % | PMI | Loan Types | Notes |
|---|---|---|---|
| 3% | Required | Conventional (Fannie/Freddie) | First-time buyer programs; income limits may apply |
| 3.5% | Required | FHA | Requires 580+ credit score; lifetime MIP on most loans |
| 5% | Required | Conventional | Widely available; no income limits; PMI removable at 20% equity |
| 10% | Required | Conventional, Jumbo | Reduced PMI rate vs. 5%; lower monthly payment |
| 20% | Not required | Conventional, Jumbo, Portfolio | No PMI; best rate pricing; immediate equity cushion |
What Is PMI and How Do You Avoid It?
Private mortgage insurance (PMI) is a policy that protects the lender — not you — if you default on the loan. Lenders require it on conventional loans when you put less than 20% down because the lower your equity, the higher the risk that the lender cannot recover the full loan balance in a foreclosure.
PMI typically costs between 0.5% and 1.5% of the original loan amount per year, added to your monthly payment. On a $360,000 loan (after a 10% down payment on a $400,000 home), PMI at 0.8% adds $240 per month — $2,880 per year.
You can cancel PMI on a conventional loan once you reach 20% equity through your mortgage payments, and it must be automatically cancelled when you reach 22% equity under the Homeowners Protection Act. If your home appreciates significantly, you can request a new appraisal and cancel PMI earlier.
FHA loans have a different rule: most FHA borrowers pay mortgage insurance premium (MIP) for the life of the loan unless they refinance into a conventional loan after reaching 20% equity.
Questions You Might Ask
How much do I need for a down payment on a house?
The minimum depends on the loan type. Conventional loans allow as little as 3% down, FHA loans require 3.5%, and VA or USDA loans allow 0% for eligible buyers. Putting down 20% eliminates PMI and reduces your monthly payment. On a $400,000 home, the key thresholds are $12,000 (3%), $20,000 (5%), $40,000 (10%), and $80,000 (20%).
What is PMI and when do I have to pay it?
PMI is private mortgage insurance — a monthly premium added to your payment when your down payment is less than 20%. It protects the lender, not you. Typical cost is 0.5%–1.5% of the loan amount per year. You can cancel it once you reach 20% equity through payments, and lenders must automatically drop it at 22% equity under federal law.
Is it better to put 20% down or invest the extra money?
It depends on your mortgage rate, PMI cost, and expected investment returns. If your mortgage rate is 7% and PMI adds 1%, putting 20% down generates an effective 8% guaranteed return. If you expect investment returns above that — and you have strong job security — investing while accepting PMI may be the better math. Run both scenarios with the calculator before deciding.
How long does it take to save for a down payment?
It depends on your target, existing savings, and monthly contribution. Saving $500/month toward a $20,000 goal with no starting savings takes 40 months. With $10,000 already saved, it takes 20 months. Add a HYSA return of 4.5% and the timeline shortens further as your balance earns interest. The calculator above shows your exact months-to-goal for each tier.
Methodology
FiscalCalc's down payment calculator uses a month-by-month accumulation model. Without a savings return rate, the timeline is linear: months = gap / monthly savings. With an annual return rate, the calculator applies compound growth each month (balance × monthly rate + monthly contribution) and iterates until the balance reaches the target, capped at 600 months (50 years). PMI threshold is set at 20% of the home price, consistent with Fannie Mae and Freddie Mac conventional loan guidelines. All calculations run client-side in your browser. Last updated: May 2026.