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%). Setting the target at the true all-in figure spares you the last-minute scramble that derails so many closings.
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 your market’s appreciation; the rent vs. buy calculator runs that full comparison honestly. 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?
Frequently asked questions
How much down payment do I really need?
The minimums: conventional loans from 3%, FHA 3.5%, VA and USDA 0% for those eligible. But 20% is the milestone that removes private mortgage insurance and wins better rates. The right answer balances waiting years 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. It typically costs 0.3–1.5% of the loan amount per year, folded into your monthly payment, and can be cancelled once you reach 20% equity. On a $360,000 loan it’s roughly $90–$450 a month — real money, but not always a reason to wait.
Is it better to wait for 20% or buy sooner with PMI?
The honest answer: it depends on your market. If home prices are appreciating faster than you can save the difference, waiting costs more than PMI does. If prices are flat, saving to 20% wins. Run our rent vs buy calculator for the full comparison — PMI is one line in a bigger equation.
How much are closing costs on top?
Typically 2–5% of the purchase price in buyer closing costs — loan fees, appraisal, title insurance, prepaid taxes and insurance. They’re due in cash at the same moment as the down payment, which is why this calculator adds them to the target: needing $80,000 down usually means needing $92,000+ in the bank.
Where should down payment savings live?
High-yield savings or short CDs — never stocks for a purchase within ~3 years. A 20% market dip the month you find the right house would be catastrophic; the few points of extra expected return aren’t worth it. Match the vehicle to the timeline.