How this is calculated
down payment = price × %; cash needed = down payment + ~3% closing costs; months = remaining ÷ monthly savings
The core math is a multiplication and a countdown: the home price times your chosen percentage gives the down payment, and the remaining gap divided by your monthly savings gives the timeline. This tool adds the line item that ambushes first-time buyers — closing costs, typically 2-5% of the price (modeled at 3% here), payable in cash at the same moment as the down payment.
The percentage itself is a strategic choice. Twenty percent is the classic threshold that avoids private mortgage insurance and wins better rates; but conventional loans accept 3-5% down and FHA 3.5%, trading a faster move-in for PMI and a larger loan. In fast-rising markets, waiting years to reach 20% can cost more in price appreciation than PMI would have; in flat markets, patience is cheap.
Park the fund somewhere boring and liquid — high-yield savings, not stocks. A down payment has a date attached, and money with a date can't afford a 30% drawdown the spring you find the right house.
Frequently asked questions
Do I really need 20% down?
No — it's the PMI-avoidance threshold, not a legal floor. Median first-time US buyers put down well under 10%. The 20% figure earns better rates and payments; the lower routes earn earlier ownership.
What is PMI and how much does it cost?
Private mortgage insurance protects the lender when you put down under 20% — typically 0.3-1.5% of the loan per year, added to your payment until you reach ~20% equity. Annoying, but not always worth years of waiting to avoid.
Can the down payment come from gifts or retirement accounts?
Often yes: documented family gifts are widely allowed, and some retirement plans permit first-home withdrawals or loans with conditions. Each route has paperwork and trade-offs — lenders will want a paper trail.