Down Payment Savings Assumptions
Determine exactly how much cash you need to bring to the closing table, and calculate how many months it will take to reach your savings goal.
Down Payment Savings Calculator
See how long it will take to save for your dream home.
User assumption, not a current savings offer. Monthly end-of-period deposits; interest tax and future yield changes excluded.
Time to Reach Your Goal
Still need to save:
$75,000
Remember closing costs (2-5% of home price) and emergency reserves, typically 3-6 months expenses.
Down Payment Milestones
Do You Really Need 20% Down in 2026?
The biggest myth in real estate is that you must have a 20% down payment to buy a house. In 2026, the National Association of Realtors reports that the median down payment for first-time buyers is actually around 8%. Our calculator helps you map out your savings timeline whether you are aiming for 3%, 10%, or the full 20%.
Average Minimum Down Payments by Loan Type
Depending on your credit profile and military status, you might qualify for programs requiring drastically less cash upfront:
- VA Loans: 0% minimum. Available only to eligible veterans and active-duty military.
- USDA Loans: 0% minimum. Available for rural and suburban homebuyers who meet certain income limits.
- Conventional Loans: 3% minimum. Best for buyers with strong credit scores (620+). Often requires PMI.
- FHA Loans: 3.5% minimum. The most popular choice for buyers with lower credit scores (580+).
The Cost of Putting Down Less Than 20% (PMI)
If you put down less than 20% on a conventional loan, your lender will charge you Private Mortgage Insurance (PMI). This fee protects the lender in case you default on the loan. It typically costs between 0.3% and 1.5% of the original loan amount per year.
However, many financial advisors argue that it is better to pay PMI and buy a home sooner with a 5% down payment, rather than waiting 5 extra years to save 20% while home prices and rents continue to rise. Use our Mortgage Payment Calculator to see exactly how much PMI will cost you each month.
Don't Forget About Closing Costs
Your down payment is not the only cash you need on closing day. You must also pay "Closing Costs"-the massive bundle of fees for appraisals, taxes, title insurance, and lender underwriting.
Closing costs typically run between 2% to 5% of the home's purchase price. This means if you are buying a $400,000 home with a 5% down payment ($20,000), you realistically need to have $32,000 to $40,000 in your bank account to actually close the deal. Check our Closing Costs Calculator for a state-specific breakdown.
Frequently Asked Questions
Can I use gift money for a down payment?
Yes. Both FHA and Conventional loans allow you to use cash gifts from family members to cover 100% of your down payment. However, the giver must sign a formal "Gift Letter" assuring the lender that the money is not secretly a loan that needs to be paid back.
What happens when I hit 20% equity?
If you have a Conventional loan, your PMI will automatically fall off once your loan balance reaches 78% of the home's original purchase price. You can also request it be removed manually at 80%. (Note: FHA MIP works differently and often cannot be removed without refinancing).
Continue your financial research
Use these closely related USFinNexus guides and tools to plan your next step.
Before waiting for a larger deposit, compare the trade-offs of a 20% down payment.
If cash is the obstacle, investigate down-payment assistance programs and their conditions.
Eligible buyers can also compare VA, USDA and FHA low-down-payment options.
Related guides
Related calculators
- Mortgage CalculatorEstimate payment, interest and amortization.
- Home Affordability CalculatorEstimate a home price that fits your budget.
Illustrative comparison scenarios
| Down payment | Savings target | Additional months |
|---|---|---|
| 3% | $12,000 | 7 |
| 3.5% | $14,000 | 9 |
| 5% | $20,000 | 15 |
| 10% | $40,000 | 35 |
| 20% | $80,000 | 75 |
Educational scenarios, not quotes, approvals, investment forecasts or tax advice. See methodology and limitations.