Down Payment Calculator

The Biggest Obstacle to Homeownership

For most first-time buyers, the monthly mortgage payment isn't the problem—the huge pile of cash required upfront is. Saving for a down payment is often the biggest financial hurdle of your life.

On a $400,000 home, a traditional 20% down payment is $80,000. For many families, that feels impossible.

The "20% Myth"

Do you really need 20% down to buy a house? No.

The "20% Rule" exists because if you pay 20%, you avoid Private Mortgage Insurance (PMI). However, most first-time buyers put down significantly less.

Common Loan Requirements:

• Conventional Loan: Minimum 3% to 5% down.
• FHA Loan (USA): Minimum 3.5% down (Good for lower credit scores).
• VA / USDA Loans: 0% down (For Veterans or Rural areas).

Don't Forget Closing Costs!

Your down payment isn't the only check you have to write on closing day. You also need "Cash to Close."

Closing Costs typically range from 2% to 5% of the home price. These cover:

• Home Appraisal & Inspection
• Title Insurance & Lawyer Fees
• Loan Origination Fees
• Pre-paid Property Taxes

Example: If you have exactly $20,000 saved for a $400k house (5%), you might actually be short on cash because $10,000 of that savings will be eaten by closing costs. Always save an extra buffer.

Savings Timeline: 3% vs 20%

Let’s see how the target percentage changes your life plans. Assume you want a $400,000 house and can save $1,000 per month.

This table illustrates why so many people choose to pay PMI. Waiting nearly 7 years to save 20% might mean house prices have risen so much that your savings are no longer enough!