How to use this calculator
- Enter the home price and your planned down payment as a dollar amount or percent of the price.
- Pick a loan program: conventional, FHA, or VA. Each has different minimum down-payment requirements and mortgage insurance rules.
- Enter the interest rate, loan term, and (in Advanced) annual property tax, home insurance, and HOA fees for your monthly payment estimate.
- Check the comparison table to see how cash to close, monthly payment, and mortgage insurance change at standard down-payment levels.
- Fill in your current savings, monthly savings, and expected return to see how long you'll take to reach your goal — or set a target purchase date to see how much you need to save per month.
How it's calculated
Down payment and LTV: Your down payment is a percent or dollar amount of the home price. Loan-to-value (LTV) is the loan amount divided by the home price, shown as a percent. A higher down payment means lower LTV and no mortgage insurance, but requires more cash upfront.
Cash to close: The sum of your down payment, estimated closing costs (a percent of the purchase price you set), and any upfront mortgage insurance or funding fee you don't finance into the loan. For conventional loans at 20% down, closing costs might run 3%, so on a $400,000 home you'd need $92,000 (20% down plus 3% closing costs) before any adjustments for property tax, insurance, or HOA.
Monthly payment (PITI): Principal, interest, property tax, insurance, and any mortgage insurance (PMI for conventional, MIP for FHA). The payment is calculated using standard amortization: M = L × r(1 + r)n ÷ [(1 + r)n − 1], where L is the loan amount, r is the monthly interest rate, and n is months remaining. On a $400,000 home with 20% down at 6.5% over 30 years, the principal and interest alone run $2,023 (before property tax, insurance, or HOA).
Conventional PMI: Required when the down payment is below 20% (LTV above 80%). This calculator uses a planning-rate estimate (0.55%/year of the loan amount, the Freddie Mac range midpoint); actual PMI varies by lender, credit score, and LTV. PMI terminates automatically when the balance reaches 78% of the original home value, per the Homeowners Protection Act, or on request once your LTV reaches 80% (20% equity).
FHA MIP: FHA loans require an upfront mortgage insurance premium (1.75% of the base loan amount, financed into the loan) and annual MIP on most loans. At 3.5% down on a $400,000 home at 6.5%, FHA costs $176/mo in annual MIP, and the cash to close is $26,000 (including the financed upfront MIP).
VA funding fee: VA loans charge a one-time funding fee (1.25% to 3.30% of the loan amount, depending on down payment and prior use) unless the borrower has a service-connected disability, in which case the fee is waived. This fee is financed into the loan by default but can be paid in cash at closing. VA loans require no down payment with full entitlement.
Savings plan: End-of-month deposits compounded monthly at the annual return rate you enter. The timeline shows your projected balance month by month. If you set a target purchase date, the calculator solves for the monthly saving needed to reach your cash-to-close goal by then, using P = (G − S(1+r)n) · r / ((1+r)n − 1), where G is the goal, S is current savings, r is the monthly rate, and n is months until your target.
Assumptions
- Conventional minimum down payment: 3% for loans eligible for Fannie Mae HomeReady or 97% LTV standard programs.
- FHA minimum down payment: 3.5% for credit scores of 580 and above; 10% for scores below 580 (both per HUD Handbook 4000.1).
- VA minimum down payment: 0% for borrowers with full entitlement (38 U.S.C. § 3703(a)(1)).
- Conventional PMI uses a flat planning-rate estimate; your actual PMI depends on credit score, down payment, property type, and lender. PMI terminates at 78% LTV or on request at 80% LTV per the Homeowners Protection Act.
- FHA MIP includes a 1.75% upfront premium (financed) and annual MIP that typically lasts 11 years or the life of the loan depending on down payment and origination date (HUD ML 2023-05).
- VA funding fee on a purchase loan ranges from 1.25% to 3.30% of the loan amount depending on down payment and prior use; borrowers with a service-connected disability (and other statutory exemptions) pay none (38 U.S.C. § 3704).
- Closing costs are modeled as a flat percent of the purchase price you set; actual costs vary by lender, location, loan program, and title fees.
- Property tax, homeowners insurance, and HOA fees are entered as annual or monthly amounts and included in the monthly payment; they don't affect cash to close.
- The comparison table holds the interest rate constant across down-payment levels and programs for a fair side-by-side comparison; real-world rates may differ by program, credit score, and LTV.
- Savings plan assumes consistent monthly deposits and a fixed annual return, compounded monthly. Real savings returns vary and can be negative; a conservative estimate (0%–2%) is a safe planning assumption.
Frequently asked questions
What's the minimum down payment for each loan type?
Conventional loans start at 3% down for eligible borrowers on Fannie Mae HomeReady and standard 97% LTV programs. FHA requires at least 3.5% down (credit score 580+) or 10% for scores below 580. VA loans require no down payment (0%) for borrowers with full entitlement.
What is cash to close?
Cash to close is the total you bring to closing: your down payment, closing costs (a percent of the home price you estimate), and any upfront fees (FHA mortgage insurance premium or VA funding fee) paid in cash rather than financed into the loan. This calculator shows it as a single line, but on a real closing disclosure, these items are itemized separately.
When can I remove PMI?
Conventional PMI is automatic at LTV above 80% and terminates once the scheduled balance falls to 78% of the original home value, under the Homeowners Protection Act (12 U.S.C. § 4902). You can also request removal at 80% LTV. FHA mortgage insurance (MIP) follows HUD rules: most loans carry annual MIP for 11 years or the life of the loan. VA loans don't require mortgage insurance.
How much does PMI or MIP actually cost?
Conventional PMI on a $400,000 home with 10% down at the planning-rate estimate would run about $165/month. FHA MIP at 3.5% down costs around $176/month on the same home. The exact amount depends on the loan amount, lender, and (for conventional) your credit score and LTV.
What's the difference between a down payment and cash to close?
Down payment is the portion of the home price you pay upfront; the rest becomes your loan. Cash to close includes the down payment plus closing costs, upfront insurance premiums, and other fees due at closing. You might have a 10% down payment but need more cash at closing if closing costs, PMI, or other fees aren't financed into the loan.
Why does my payment change across loan programs at the same down payment?
Conventional, FHA, and VA loans carry different mortgage insurance amounts and upfront fees. FHA includes a mandatory upfront and annual insurance premium; conventional requires PMI if down payment is below 20%; VA requires no mortgage insurance but charges a funding fee. So the same down payment on the same home will have different monthly costs depending on the program.
What happens if I put down less than 20%?
On a conventional loan, down payments below 20% (LTV above 80%) require PMI. For example, with 10% down on a $400,000 home at 6.5% over 30 years, PMI would run for about 9 years and 1 month before the balance reaches 80% of the original value. A larger down payment eliminates or reduces mortgage insurance, lowering your monthly payment and total interest paid, but requires more cash upfront.
Should I put down 20% to avoid PMI?
Not always. A lower down payment lets you buy sooner and keeps more cash liquid for emergencies or other investments. This calculator estimates conventional PMI at about 0.55%/year of the loan amount (a planning-rate estimate; actual PMI varies by lender and credit score), often less than the difference in interest on a larger loan. If you're confident you can save and invest the difference, a lower down payment might make sense. This calculator helps you compare across down-payment levels.
How do I use the savings plan?
Enter your current savings, the amount you plan to save per month, and the interest rate you expect on that money (for example, the APY on a high-yield savings account or money market fund). The timeline shows your projected balance. If you have a target purchase date, enter it and the calculator will tell you how much you need to save per month to hit your cash-to-close goal by then.
What if I can't reach my savings goal?
The calculator shows you the months-to-goal at your planned monthly saving rate. If it's longer than your timeline, you can increase your monthly savings, lower your down payment (and bring more cash to closing by taking a larger loan and paying mortgage insurance instead), use a lower-cost loan program (FHA or VA if eligible), or extend your timeline. Each choice has trade-offs the comparison table helps you weigh.
Related calculators
Related guides
Key terms
Sources
- CFPB — What are closing costs?
- CFPB — When can I remove PMI?
- CFPB — What is a loan-to-value ratio?
- Fannie Mae — Eligibility Matrix (3% down options)
- Freddie Mac — Breaking down PMI
- HUD Handbook 4000.1 — FHA down payment requirements
- VA — Purchase loans (no down payment with full entitlement)
- VA — VA funding fee and closing costs
Disclaimer: This calculator provides estimates for educational purposes only and is not financial, tax, or legal advice or an offer of credit. Actual payments depend on your lender, loan terms, taxes, and insurance. Consult a qualified professional before making financial decisions.