Down Payment Calculator

Down payment requirements vary by loan type. Conventional loans typically require 3-20%, FHA loans require 3.5%, VA and USDA loans offer 0% down for qualified buyers. A 20% down payment helps you avoid Private Mortgage Insurance (PMI) and get better rates.

PMI (Private Mortgage Insurance) protects the lender if you default on a conventional loan with less than 20% down. It typically costs 0.3-1.5% of the loan amount annually. Avoid PMI by making a 20% down payment, using a piggyback loan, or choosing a VA/USDA loan.

Yes, most loan programs allow gift funds from family members for down payment. You'll need a gift letter stating the money is a gift, not a loan. FHA allows 100% of down payment from gifts, conventional loans require at least 5% from your own funds for investment properties.

Not always. While larger down payments reduce monthly payments, interest, and PMI, you should maintain emergency savings. If you can invest money at a higher return than your mortgage rate, a smaller down payment might make financial sense. Consider your overall financial picture.

FHA loans require a minimum 3.5% down payment if your credit score is 580 or higher. If your credit score is 500-579, you'll need 10% down. FHA loans also require mortgage insurance regardless of down payment amount.

Savings time depends on your income, expenses, and target down payment. For a $300,000 home with 20% down ($60,000), saving $1,000/month takes 5 years. Consider first-time homebuyer programs, which may require smaller down payments, to speed up the timeline.

Acceptable sources include: personal savings, checking/savings accounts, retirement account withdrawals (with penalties), sale of assets, gift funds from family, employer assistance programs, and down payment assistance grants. Money must be documented and sourced.

Yes, but carefully. You can withdraw up to $10,000 from an IRA penalty-free for first-time home purchase. For 401(k)s, you may borrow up to 50% (max $50,000) or take a hardship withdrawal with taxes and 10% penalty. Consider the long-term retirement impact.

A piggyback loan (80-10-10 or 80-15-5) uses a second mortgage to avoid PMI. For example, 80-10-10 means: 80% first mortgage, 10% second mortgage, 10% down payment. This avoids PMI but you'll have two mortgage payments and the second loan usually has a higher rate.

No, eligible veterans, active-duty service members, and surviving spouses can buy homes with 0% down through VA loans. You'll pay a VA funding fee (1.4-3.6% of loan amount) unless you're exempt due to disability. No PMI is required regardless of down payment.

Many states and cities offer down payment assistance through grants, forgivable loans, or deferred-payment loans. Programs often target first-time buyers, low-to-moderate income families, teachers, or specific professions. Check with your state housing finance agency and local programs.

Larger down payments typically qualify for lower interest rates because they reduce lender risk. The difference between 5% and 20% down might be 0.25-0.5% in rate. On a $300,000 loan, this could save $50-100 monthly and tens of thousands over the loan term.

This depends on your mortgage rate vs. investment returns. If you can reliably earn more investing than your mortgage rate (after tax benefits), smaller down payment may be smarter. However, factor in PMI costs, risk tolerance, and the guaranteed "return" of avoiding interest. Consult a financial advisor for your situation.