Buying Tools
Down Payment Calculator
Calculate your down payment, closing costs, and total cash needed to close. Includes PMI impact and monthly payment breakdowns.
Down Payment Details
Percent of home price
Annual PMI if LTV > 80%
Percent of home price
Total Cash Needed
$0
Insights
How Much Should You Put Down?
Deciding how much money to put toward a home purchase is one of the most consequential financial choices you will make. While the traditional 20% down payment remains the gold standard for avoiding private mortgage insurance (PMI), thousands of American homebuyers successfully purchase homes every year with 3%, 5%, or 10% down.
Putting down less cash preserves your liquidity for emergency funds, home maintenance, and furniture, but results in a higher loan amount and monthly payment. Conversely, putting down 20% or more maximizes your monthly purchasing power and eliminates extra insurance fees.
In 2026, balancing current interest rates with your available savings requires analyzing not just the down payment itself, but also estimated closing costs—which typically add 2% to 4% of the purchase price at the closing table.
PMI and the 20% Threshold
When your loan-to-value (LTV) ratio exceeds 80%—meaning your down payment is less than 20%—lenders require private mortgage insurance to protect against default. PMI adds a monthly fee directly to your mortgage payment. Fortunately, under federal law, conventional PMI cancels automatically once your mortgage balance reaches 78% of the home's original value, or you can request cancellation when you reach 80%.
Frequently asked questions
How much down payment do I need?
While traditional wisdom recommends putting 20% down to avoid private mortgage insurance (PMI), many buyers purchase homes with much less. FHA loans require as little as 3.5% down, conventional loans can start at 3% for qualified first-time buyers, and VA or USDA loans offer 0% down options for eligible borrowers.
Is 20% down required?
No, 20% down is not required for most mortgages. However, putting down 20% or more allows you to completely avoid PMI, lowers your monthly loan payment, and often qualifies you for more favorable interest rates from lenders.
What is PMI and how do I avoid it?
Private Mortgage Insurance (PMI) is an extra fee charged by lenders when your loan-to-value (LTV) ratio exceeds 80% (i.e. your down payment is less than 20%). You can avoid PMI entirely by putting down at least 20%, or by opting for lender-paid mortgage insurance or piggyback loans.
Are closing costs included in the down payment?
No, closing costs are separate from your down payment. Closing costs typically range from 2% to 5% of the home purchase price and cover lender fees, title insurance, appraisals, and prepaid taxes. You must budget for both your down payment and closing costs to determine your total cash needed to close.
Can I use gift money for a down payment?
Yes, most loan programs (conventional, FHA, VA) allow you to use monetary gifts from family members, close relatives, or approved down payment assistance programs for part or all of your down payment. Lenders will require a signed gift letter confirming the funds are not a loan.