Down Payment Calculator — Savings Goal & PMI Warnings

The Formula

The down payment is the cash you bring to the home purchase. 20% is the magic number — at 20%, you eliminate PMI (Private Mortgage Insurance), which costs roughly 0.8% of the loan amount per year. The calculator also factors in the time value of your savings: money you save each month earns compounding returns in a savings account, accelerating your timeline to reach the down payment goal.

Variable Definitions

How to Use This Calculator

1. 1

   Enter the price of the home you are targeting. Be realistic — include your target price range.

2. 2

   Select your target down payment percentage — 20% eliminates PMI, 3.5% is FHA minimum, 5% is conventional minimum.

3. 3

   Enter what you have already saved and how much you can save monthly toward the goal.

4. 4

   Enter your expected annual return on savings (high-yield savings accounts pay 3–5% in 2026; conservative investments 4-6%).

5. 5

   The calculator shows your timeline to reach the goal, PMI costs you will pay if under 20%, and an estimated monthly mortgage payment at a typical rate.

Common Applications

• Calculate how long it will take to save enough for a down payment on a home based on your current savings and monthly contribution.
• Compare the cost of a 20 percent down payment that eliminates PMIInsurance required by lenders when the down payment is less than 20% of the home price. Protects the lender, not the borrower. versus a smaller down payment that gets you into a home sooner.
• Estimate the total PMIInsurance required by lenders when the down payment is less than 20% of the home price. Protects the lender, not the borrower. or MIP costs you will incur if your down payment is below the conventional or FHA minimum thresholds.

20% down eliminates PMI and saves thousands -- but lower down payment options get you into a home sooner

Understanding the Concept

The down payment is the biggest barrier to homeownership for most buyers. A 20% down payment eliminates PMIInsurance required by lenders when the down payment is less than 20% of the home price. Protects the lender, not the borrower. — Private Mortgage Insurance that costs roughly 0.8% of the loan amount per year. On a $300,000 loan, that is $2,400/year you pay until you reach 20% equity. FHA loans allow as little as 3.5% down but require MIP (Mortgage Insurance Premium) for the life of the loan if under 10% down. Conventional loans with less than 20% down require PMIInsurance required by lenders when the down payment is less than 20% of the home price. Protects the lender, not the borrower. but it can be removed once you hit 20% equity. This calculator shows you the exact savings timeline and the true cost of a low down payment. It also shows an estimated monthly mortgage payment so you can see the full picture of homeownership costs beyond just the down payment. The key trade-off: a smaller down payment gets you into a home sooner, but you pay more each month and spend thousands on PMIInsurance required by lenders when the down payment is less than 20% of the home price. Protects the lender, not the borrower.. A larger down payment requires more patience but saves significant money in the long run.

Frequently Asked Questions