Down Payment Calculator

How much down payment do you need?

Most buyers use a down payment calculator to estimate how much cash they need upfront and how it affects their monthly payment.

The exact amount you need depends largely on the loan program and the price of the home. While many buyers still believe 20% is required, most first-time home buyers actually put down between 6% and 7%.

However, your down payment is only part of the equation. You also need to budget for closing costs, which typically range from 2% to 5% of the purchase price. Combined, these two figures equal the total cash you actually need to close on the house.

Is 20% down really necessary?

Putting 20% down is not strictly necessary, but it does provide significant financial benefits. Reaching this threshold allows you to completely avoid Private Mortgage Insurance (PMI), an added monthly fee lenders charge to protect themselves when you have less equity in the home.

That being said, delaying your purchase for years just to save 20% can sometimes mean missing out on getting into the market entirely or losing to rising interest rates. Many buyers find that accepting a temporary PMI charge is a reasonable trade-off to secure a home sooner.

How down payment affects your monthly payment

Your down payment directly impacts your monthly cost in two ways. First, a larger down payment reduces the total principal balance of your loan, meaning you pay interest on a smaller amount over the course of 15 to 30 years.

Second, if your down payment crosses the 20% equity mark, your monthly payment drops notably because PMI drops off entirely. Even smaller increments matter—increasing your down payment from 5% to 10% can often secure a slightly better interest rate from your lender.