Down Payment Calculator
See how much down payment you need and how it affects your monthly payment and total cost.
Disclaimer: This calculator is for general educational and informational purposes only. It does not constitute financial advice, investment advice, tax advice, or legal advice and is not a substitute for consultation with a qualified professional. No fiduciary or advisory relationship is created by your use of this tool. Results are estimates based on the inputs you provide, standard mathematical formulas, and publicly available data that may not be current and may not reflect your individual financial situation, applicable tax laws, or other relevant factors. Neither MayoCalc nor Cook Media Systems assumes any liability for losses, damages, or other consequences arising from the use of any information or results provided by this tool. Always consult a qualified financial advisor, certified public accountant, or attorney before making financial decisions. See our full
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How Much Down Payment Do You Need?
The traditional recommendation is 20% of the home's purchase price, which avoids private mortgage insurance (PMI). However, many loan programs allow much less: FHA loans require as little as 3.5%, and some conventional loans allow 3-5% down. The trade-off is that a smaller down payment means a larger loan, higher monthly payments, PMI costs (0.5-1% of the loan annually), and more total interest over the life of the mortgage.
How to Use This Calculator
Enter the home price and your target down payment percentage. The calculator shows the down payment amount in dollars, the resulting loan amount, estimated monthly payment, and whether PMI will be required. You can also enter your current savings and a monthly savings amount to see how long it will take to reach your down payment goal.
Down Payment Trade-Offs
On a $350,000 home at 6.5%: 20% down ($70,000) means a $280,000 loan with a $1,770 monthly payment and no PMI. 5% down ($17,500) means a $332,500 loan with a $2,102 monthly payment plus approximately $138/month in PMI. Over 30 years, the 5%-down option costs roughly $145,000 more in total interest and PMI. However, if it takes you 5 years to save 20% versus 1 year for 5%, the trade-off includes 4 years of renting versus building equity.
Down Payment FAQ
Is 20% always the right target?
Not necessarily. If you can invest your extra savings at a higher return than your mortgage rate, a smaller down payment with PMI may be financially optimal. Also, if putting 20% down would drain your emergency fund, it is safer to put less down and maintain cash reserves. The decision depends on your full financial picture.
Can I use retirement funds for a down payment?
First-time homebuyers can withdraw up to $10,000 from a traditional IRA without the 10% early withdrawal penalty (though income tax still applies). Roth IRA contributions (not earnings) can be withdrawn at any time without penalty. 401(k) loans are also an option but risk your retirement savings. In most cases, it is better to save separately for a down payment rather than raiding retirement accounts.