The number listings never show
A “$400,000 home with 20% down” sounds like an $80,000 problem. It’s closer to a $92,000 one: buyer closing costs — loan origination, appraisal, title insurance, prepaid taxes — arrive at the same table, in cash, typically 2–5% of the price (this calculator uses 3%). Replace that planning allowance with the actual Loan Estimate once it is available.
Below 20% down, PMI joins the monthly payment — the warning above estimates it for your inputs. Whether to wait for 20% or buy sooner with PMI depends on the full cost and liquidity comparison; the rent vs. buy calculator runs that full comparison honestly. The estimate uses Freddie Mac’s approximate $30–$70 monthly range per $100,000 borrowed. And once you know your monthly target, our savings goal tool handles any other deadline the same way — while the affordability calculator answers the prior question: is this the right price range at all?
Method, example, and sources
How this calculator works
The cash target is the chosen down-payment percentage plus a built-in 3% closing-cost allowance. Current savings compound at the entered APY, then the contribution is added at each month-end until the target is reached or the 50-year safety limit is hit. Below 20% down, the page also shows a separate PMI range estimate.
Worked example
For a $400,000 home, 20% down, $20,000 already saved, $1,000 added monthly, and a constant 4% APY, the cash target is $92,000. It is reached in 62 months, when the projected savings balance is about $93,109.
What the estimate leaves out
- The 3% closing-cost allowance is a planning input inside the model; the actual Loan Estimate can be above or below it.
- The PMI range is not a quote and does not use a borrower credit profile, loan program, insurer, or cancellation schedule.
- The home price, APY, and monthly contribution stay constant; taxes on savings, fees, withdrawals, inflation, and changing home prices are excluded.
Primary sources
Frequently asked questions
How much down payment do I really need?
Some conventional programs start around 3%, and eligible government-backed programs can require less or no down payment. But 20% is the conventional-loan milestone that generally removes private mortgage insurance. The right answer balances waiting to save more against buying sooner with PMI — this calculator shows the cash gap for any percentage.
What is PMI and what does it cost?
Private mortgage insurance protects the lender when you put down less than 20% on a conventional loan. Freddie Mac gives an approximate range of $30–$70 per month for every $100,000 borrowed. On a $360,000 loan that is roughly $108–$252 a month; your credit, loan-to-value ratio, and quote determine the actual premium.
Is it better to wait for 20% or buy sooner with PMI?
It depends on the actual PMI quote, mortgage rate, rent, home price, transaction costs, cash reserves, and how long you expect to stay. Use the rent vs. buy calculator to test several scenarios rather than treating appreciation alone as the deciding factor.
How much are closing costs on top?
The CFPB gives 2–5% of the purchase price as an early planning range, separate from the down payment. The calculator uses 3%, but the Loan Estimate, seller credits, lender credits, location, and loan type determine the actual cash needed.
Where should down payment savings live?
Match the account’s risk, access rules, insurance coverage, and maturity to the purchase horizon. Market investments can lose value when the cash is needed; insured deposit accounts avoid market loss but have their own rates and withdrawal terms.