Down Payment Calculator

A 20% down payment may avoid private mortgage insurance on a conventional loan, but other loan programs have different insurance and fee rules. A larger down payment reduces the amount borrowed while leaving less cash available. Compare the payment, insurance, closing costs and reserve under each program and check its eligibility requirements. Future home prices and investment returns are uncertain; the calculator illustrates the assumptions entered, not a guaranteed outcome.

Several low-down-payment loan programs make homeownership accessible before you reach the 20% threshold. FHA loans require only 3.5% down for borrowers with credit scores of 580 or above, and just 10% for scores between 500 and 579, though they come with mandatory mortgage insurance premiums that can last the life of the loan if you put less than 10% down. VA loans allow eligible veterans, active-duty service members, and surviving spouses to purchase with 0% down and no monthly mortgage insurance — one of the most valuable benefits in personal finance. USDA loans similarly offer 0% down for properties in eligible rural and suburban areas, with income limits based on area median income. Some conventional programs, including Fannie Mae HomeReady and Freddie Mac Home Possible, offer low down payments subject to eligibility and may require PMI. Review the lender’s insurance costs and cancellation terms. State housing finance agencies in nearly every state layer additional grants and forgivable second loans on top of these federal programs, often targeting first-time buyers and moderate-income households.

A larger down payment reduces the loan principal and can reduce interest and insurance costs, depending on the loan terms. Keeping or investing the cash preserves flexibility but may earn more or less and can involve losses. The comparison depends on taxes, borrowing terms, investment risk and how long you keep the loan. Consider the cash you need for closing costs, emergencies and other goals before choosing an amount.

More than 2,000 down payment assistance programs operate across the United States, administered by state housing finance agencies, municipalities, non-profits, and employers. Program structures vary widely: some offer outright grants that never require repayment, others provide forgivable second loans that are fully forgiven after five to ten years of occupancy, and others use deferred loans repayable only at sale or refinance. Many programs target first-time buyers — typically defined as anyone who has not owned a home in the past three years — earning between 80% and 120% of the area median income. Fannie Mae’s HomeReady and Freddie Mac’s Home Possible programs pair well with DPA funds, allowing combined loan-to-value ratios above 95% with reduced PMI premiums compared to standard conventional loans. Employer-assisted housing is another underutilized resource: some large employers, hospitals, and school districts offer forgivable grants of $5,000–$20,000 to employees purchasing near the workplace. Search your state’s HFA website, the HUD-approved housing counselor directory, and Down Payment Resource (an aggregator of 2,000+ programs) to identify every program you qualify for before finalizing your savings target.

For illustration, a $400,000 home appreciating at a constant 4% annual rate would cost $432,640 after 24 months: $400,000 × 1.04². At a constant 5% annual rate, the same home would cost about $470,642 after 40 months, so a 20% down payment would be about $94,128. These are examples, not forecasts; actual prices may rise or fall. The moving-target calculation applies the entered annual appreciation assumption over time. Compare the estimated costs of buying sooner and waiting, including loan and insurance assumptions, rather than assuming either option will always build more equity.