Down Payment Savings Planner

Enter your savings rate and target amount — see your down payment timeline, how a high-yield account shortens it, and minimum requirements by loan type.

How to Plan Your Down Payment Savings

  • The conventional minimum is 3% down (for eligible first-time buyers), with 20% being the threshold to avoid PMI. FHA loans require 3.5% with a credit score of 580+ or 10% with scores as low as 500.
  • Your target down payment should include closing costs (2%–5% of purchase price) and a cash reserve — most lenders want to see 2–3 months of mortgage payments in savings after closing.
  • Even a modest rate of return on your savings shortens the timeline. Money sitting in a high-yield savings account earning 4%–5% APY grows meaningfully over a 2–3 year savings period.

Calculation details

Methodology

The savings projection starts with current savings, applies the entered annual savings rate divided monthly, adds the monthly contribution, and repeats until the target percentage of home price is reached. The comparison table uses a 30-year fixed P&I payment and a simplified annual PMI estimate when down payment is below 20%.

Assumptions and limitations

  • The savings yield and monthly contribution remain constant and taxes on interest are excluded.
  • The target does not automatically include closing costs, reserves, moving costs, gifts, or assistance programs.
  • Home price is held constant while saving.
  • PMI uses a simplified 0.8% annual estimate and is not an insurer or lender quote.
  • Payment comparisons exclude taxes, homeowners insurance, HOA dues, and loan fees.

Worked example: saving for 20% down

  • $450,000 target home price
  • 20% target, or $90,000
  • $25,000 current savings
  • $1,500 monthly contribution
  • 4.5% annual savings-rate assumption

The model reaches about $91,797 in month 39, or roughly 3 years and 3 months. About $8,297 of the ending balance comes from modeled interest beyond starting savings and contributions.

A changing home price, savings yield, or contribution changes the timeline. Budget separately for closing costs and post-closing reserves.

Official sources

Frequently Asked Questions

How much should I put down on a house?

The minimum is 3% for conventional loans (first-time buyers) or 3.5% for FHA. The traditional recommendation is 20% to avoid PMI, but this isn't always the right answer. A larger down payment means lower monthly payment and no PMI, but ties up capital. A smaller down payment lets you buy sooner and keep cash for investments or emergencies. The right amount depends on your market, savings rate, and opportunity cost.

What is the minimum down payment to avoid PMI?

On a conventional loan, you need at least 20% down to avoid private mortgage insurance (PMI). With less than 20%, PMI typically costs 0.2%–2% of the loan amount annually. However, PMI isn't forever — it's automatically cancelled when your balance reaches 78% of the original purchase price. Some borrowers intentionally put down less than 20% and accept PMI, especially if they expect their home to appreciate quickly.

How long does it take to save for a down payment?

It depends on the target amount and your monthly savings rate. On a $400,000 home with 5% down target ($20,000), saving $800/month in a 4.5% APY high-yield savings account gets you there in about 2 years. For 20% down ($80,000) at the same rate, it takes about 7.5 years. First-time buyer programs, gift funds from family, and down payment assistance programs can significantly shorten the timeline.

Can I use gift money for a down payment?

Yes — most loan programs allow gift funds from family members, though the rules vary. Conventional loans require a signed gift letter stating no repayment is expected. FHA allows gifts from family, employers, and charitable organizations. VA and USDA loans are more flexible. Document the gift transfer carefully: lenders will verify the source and may require a bank statement showing the funds were received.

How to use this estimate

This calculator is an educational planning tool. Results are based on the figures and assumptions entered by the reader, use standard mortgage mathematics, and are not a loan offer, approval, or substitute for a lender's Loan Estimate. Taxes, insurance, fees, mortgage insurance, and available rates vary by borrower, property, lender, and location.

Review the assumptions, compare more than one scenario, and confirm the final numbers with a licensed mortgage professional before making a financial commitment.