Calculate the exact down payment needed for any home price, compare 3%, 5%, 10%, and 20% down payment scenarios, see PMI costs, and estimate total closing costs. Know exactly how much to save before buying your first home. Free, instant, no sign-up.
Down payment, PMI, closing costs & loan comparison
The minimum down payment depends on your loan type: Conventional loans require as little as 3% (Fannie Mae HomeReady, Freddie Mac Home Possible programs) or 5% standard. FHA loans require 3.5% with a credit score of 580+ or 10% with a score of 500–579. VA loans (for active military, veterans, and surviving spouses) require 0% down with no PMI. USDA loans also require 0% down for eligible rural properties. The standard 20% down payment eliminates PMI entirely — but for a $400,000 home, that's $80,000 in cash, which is out of reach for many first-time buyers. On a $400,000 home: 3% down = $12,000; 5% = $20,000; 10% = $40,000; 20% = $80,000.
PMI (Private Mortgage Insurance) applies to conventional loans when the down payment is less than 20%. PMI typically costs 0.5%–1.5% of the loan amount annually. On a $380,000 loan at 0.8% PMI = $253/month — which vanishes automatically when the loan balance reaches 80% of the original purchase price (Homeowners Protection Act). Don't let PMI fear push you to wait years more to save 20% if home prices are rising: if a $400,000 home appreciates 5% while you save, it becomes $420,000 — your required 20% down payment grew from $80,000 to $84,000 while the home cost you $20,000 more to buy.
Federal: FHA loans (3.5% down), USDA, VA. State programs: most states offer down payment assistance grants (2%–5% of purchase price) for first-time buyers within income limits. HUD-approved housing counseling is free. Fannie Mae/Freddie Mac: HomeReady and Home Possible allow 3% down with flexible income limits and reduced PMI rates for qualifying borrowers.
Expect 2–5% of the loan amount in closing costs. On a $360,000 loan: $7,200–$18,000. Typical costs: origination fee (0.5–1%), appraisal ($500–$800), title insurance ($1,000–$2,500), escrow setup ($500–$1,000), attorney fees (in some states), prepaid interest, and property tax escrow. Seller concessions can cover closing costs — ask your agent.
Putting 20% down: no PMI, lower rate (0.25%–0.5% better), lower monthly payment, instant 20% equity. Putting 5% down: buy sooner, keep cash for investments or emergencies, opportunity to benefit from home appreciation on a bigger leveraged asset. At 6.4% mortgage rates, the math favors earlier buying in most appreciating markets — especially with 3%–5% annual appreciation.
Conventional loans allow down payments from gift funds with a gift letter (no repayment required). FHA allows 100% gift for down payment. VA and USDA allow gifts. The gift giver must document the gift with a signed letter stating no repayment is expected. The money must typically be seasoned in your account for 60 days or the gift must be documented to the lender's satisfaction.
The down payment does three things at once, and only the first is obvious. It reduces the amount borrowed, so it lowers the payment. At 20% it removes private mortgage insurance entirely. And it improves the loan-to-value ratio, which frequently earns a better interest rate — meaning the marginal dollar of down payment can be worth considerably more than the interest it directly avoids. Working against all of this is opportunity cost: money in home equity is illiquid and earns the mortgage rate, not the market return, so the largest possible down payment is not automatically the best one.
Down payment = Home price × down payment %Loan amount = Home price − Down paymentLTV = (Loan amount ÷ Home price) × 100where:
Assumptions: Excludes closing costs, prepaid escrow and moving expenses, all of which are due at the same time. Conventional loans allow 3%, FHA 3.5% and VA and USDA nothing at all, each with its own insurance consequences.
Compare the two down payments on the same house at 6.5% over 30 years, with PMI at 0.5% on the smaller deposit.
Result20% down saves $453.18 a month — for $45,000 more upfront
That saving is a 12.1% annual return on the extra $45,000, which is difficult to beat elsewhere with certainty. But the comparison changes once PMI cancels at 80% LTV, after which the gap narrows to $284 — so the true value of the larger deposit depends on how long PMI would otherwise have run.