How much down payment do I really need?

While 20% is ideal to avoid Private Mortgage Insurance (PMI), you can buy a home with as little as 3% down for a conventional loan, or 3.5% for an FHA loan. VA and USDA loans even offer 0% down for eligible borrowers.

Does a larger down payment lower my interest rate?

Yes, generally. A larger down payment reduces the lender's risk, which often translates to a better interest rate. It also significantly lowers your monthly payments since you are borrowing less money overall.

What are closing costs and when do I pay them?

Closing costs are fees paid at the end of your mortgage transaction. They typically range from 2% to 5% of the loan amount and include appraisal fees, title insurance, and lender fees. They are paid in addition to your down payment.

First-Time Buyer

First-Time Home Buyer Down Payment Calculator

Most first-time buyers put down between 3% and 10%. This calculator shows exactly how much cash you need and how your choice affects your monthly payment and PMI costs. Buying for the first time? See the mistakes most buyers regret →

Target Home

Home Price

Cash Available

Down Payment %

Include Closing Costs

Closing Cost Percent

Loan Details

Interest Rate

Loan Term (Years)

Typical down payment ranges

3–5% Minimum upfront cost, but higher monthly payments and PMI.
10–15% Balanced approach between upfront cash and monthly cost.
20%+ No PMI and lower long-term cost.

Example:

If you buy a $400,000 home:

• 5% down ($20,000): Higher monthly payment + PMI
• 20% down ($80,000): Lower monthly payment, no PMI

Difference: You may save $200–$400/month depending on your rate.

Cash Needed at Closing

Cash needed to buy this home

$28,000

For a $350,000.00 home, this is a high cost upfront requirement. Many buyers aim for $35,000.00–$70,000.00 depending on strategy.

Down payment

$17,500

Closing costs

$10,500

High Cost Entry

Low down payment reduces upfront cash but increases monthly cost and adds PMI. Consider increasing to 10–15% if possible.

Estimates based on your inputs. Actual results may vary. Terms →

Purchase Composition

Your cash

Financed amount

Higher down payment reduces loan size and monthly cost

Down Payment Scenarios

Scenario	Cash Needed	PMI	Monthly (P&I)
Low (5%)Current	$28,000	Yes	$2,170
Medium (10%)	$45,500	Yes	$2,050
Strong (20%)Best Value	$80,500	No	$1,830

What should you do next?

If your down payment is below 10%, your monthly cost will likely be significantly higher due to PMI.

→ If your priority is lower monthly payments, consider increasing your down payment.
→ If your priority is getting into the market sooner, accepting PMI may still make sense.

Most buyers fall between these two trade-offs.

How does your down payment affect maximum affordability?Calculate the exact monthly cost of your loan

Frequently asked questions

What first-time buyers need to know

FHA Loan - 3.5% down

Requires minimum 580 credit score. Includes mortgage insurance for life of loan.

Conventional - 3% down

Best for buyers with 620+ credit score. PMI cancels at 20% equity.

20% down - no PMI

Eliminates PMI entirely. Is 20% down actually necessary? → Lower monthly payment but requires more upfront cash.

Related Guide

How to Buy a House on a Tight Budget

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