Down Payment Calculator — Free Online Savings Planner

How to Use the Down Payment Calculator

This calculator helps you build a realistic savings plan for your home purchase. It accounts for compound interest on your savings so you can see how your money grows over time. Follow these steps to create your personalized down payment plan.

1. Enter the home purchase price. Start with the price range you are targeting. For most markets in 2026, this is between $250,000 and $500,000 for a single-family home. If you are unsure, research median home prices in your preferred area using sites like Zillow or Realtor.com. You can adjust this number later to compare different price points.
2. Choose your target down payment percentage. The standard recommendation is 20% to avoid private mortgage insurance (PMI), but many buyers put down less. Enter 5%, 10%, or 20% to see how each option changes your savings timeline. Our calculator instantly updates the target dollar amount based on your selection.
3. Input your current savings balance. Enter the total amount you have already set aside specifically for your down payment. This is your starting point. If you have $15,000 saved and are targeting a $70,000 down payment, the calculator determines how long it takes to bridge the remaining $55,000 gap.
4. Set your monthly savings contribution. Enter the amount you can realistically save each month toward your down payment. Be honest with this number to get an accurate timeline. A good rule of thumb is to save 15-20% of your take-home income for housing goals. Even modest increases in monthly savings significantly shorten your timeline.
5. Review your results. The calculator shows your total savings timeline in months and years, the interest earned on your savings during the saving period, a pie chart breaking down contributions versus interest earned, and the remaining loan amount after your down payment. Use this information to adjust your strategy and set realistic homebuying goals.

Experiment with different scenarios by adjusting the inputs. You might find that increasing your monthly savings by just $200 cuts a full year off your timeline, making the extra discipline worthwhile.

The Down Payment Savings Formula

The down payment calculator uses a future value of annuity formula combined with compound interest on your existing savings. Understanding this math helps you appreciate why starting early and earning interest on your savings makes such a meaningful difference.

Each month, the calculator applies the following growth to your balance:

• Monthly Interest = Current Balance × (Annual Rate ÷ 12 ÷ 100)
• New Balance = Current Balance + Monthly Interest + Monthly Savings
• Repeat until the balance reaches or exceeds the target down payment

Step-by-Step Savings Example

Consider saving for a 20% down payment on a $350,000 home with $15,000 already saved, contributing $2,000 per month at a 4.5% annual savings rate:

1. Target amount: $350,000 × 20% = $70,000
2. Amount remaining: $70,000 − $15,000 = $55,000
3. Monthly rate: 4.5% ÷ 12 = 0.375%
4. Month 1: Interest = $15,000 × 0.00375 = $56.25. New balance = $15,000 + $56.25 + $2,000 = $17,056.25
5. Month 2: Interest = $17,056.25 × 0.00375 = $63.96. New balance = $17,056.25 + $63.96 + $2,000 = $19,120.21
6. Final result: Approximately 26 months (2 years 2 months) to reach $70,000
7. Interest earned: Approximately $1,400 in interest over the savings period

Without any interest, saving $2,000/month from a $15,000 starting balance would take about 27.5 months. The 4.5% annual return on a high-yield savings account shaves approximately 1.5 months off your timeline and adds meaningful interest earnings.

Practical Down Payment Savings Scenarios

These real-world examples demonstrate different saving strategies and timelines based on various financial situations.

First-Time Buyer on a Moderate Income

Priya is a 28-year-old marketing specialist earning $65,000 per year. She wants to buy a $280,000 condo with a 10% down payment ($28,000). She currently has $8,000 saved and can set aside $1,200 per month. At a 4.5% HYSA rate, she reaches her goal in approximately 16 months. The interest earned on her growing balance totals about $450, effectively giving her a free month of savings. Priya also plans to apply for state first-time buyer assistance, which could provide an additional $5,000 grant, reducing her timeline to about 12 months.

Dual-Income Couple Targeting 20%

Marcus and Leah earn a combined $145,000 and want to buy a $420,000 home in the suburbs with a full 20% down payment ($84,000). They have $22,000 saved and contribute $3,500 per month to their joint savings account earning 4.5% APY. Their timeline is approximately 17 months. During this period, they earn roughly $1,800 in interest. By choosing the 20% down payment over a lower amount, they avoid PMI of approximately $175/month ($2,100/year), which pays for itself within the first two years of homeownership.

Aggressive Saver Using Windfalls

David is a software engineer earning $120,000. He targets a $500,000 home with 20% down ($100,000). He starts with $30,000 and saves $4,000/month at 4.5%. His base timeline is approximately 16 months. However, he plans to apply his annual $8,000 tax refund and a $5,000 year-end bonus to his savings. These lump sums accelerate his timeline to about 13 months and earn him approximately $2,100 in interest. David uses this calculator monthly to track his progress and stay motivated.

Low Down Payment with FHA Loan Strategy

Keisha is a teacher earning $52,000 who wants to buy a $230,000 home using an FHA loan with a 3.5% down payment ($8,050). She has $3,000 saved and can contribute $700 per month. At 4.5% interest, she reaches her target in approximately 7 months. While the lower down payment means she will pay mortgage insurance premiums (MIP), getting into a home sooner allows her to build equity instead of paying rent. She plans to refinance to a conventional loan once she reaches 20% equity, which she tracks using our mortgage payoff calculator.

Down Payment Tips and Complete Savings Guide

Saving for a down payment is often the biggest hurdle to homeownership. These proven strategies help you reach your goal faster while maintaining financial stability throughout the process.

Automate Your Savings

Set up an automatic transfer from your checking account to a dedicated down payment savings account on every payday. Treating savings like a non-negotiable bill ensures consistency. Most banks offer free automatic transfers that can be scheduled weekly, biweekly, or monthly. When your contribution happens automatically before you see the money in your checking account, you naturally adjust your spending to accommodate the transfer.

Use a High-Yield Savings Account

A standard savings account at a traditional bank may earn 0.01-0.5% APY, while a high-yield savings account (HYSA) at an online bank can earn 4.0-5.0% APY in 2026. On a $50,000 balance, that difference is approximately $2,000 per year in additional interest. Open a separate HYSA specifically for your down payment to keep the funds segregated and earning maximum interest. Look for accounts with no minimum balance requirements and no monthly fees.

Apply All Windfalls to Savings

Tax refunds, work bonuses, cash gifts, side hustle income, and any unexpected money can dramatically accelerate your timeline. A $5,000 tax refund applied to your down payment fund is equivalent to 2.5 months of $2,000 monthly savings. Create a personal rule that at least 50% (ideally 100%) of every windfall goes directly into your down payment account. These lump sums also earn compound interest from the moment they are deposited.

Research First-Time Buyer Programs

Many state and local governments offer down payment assistance programs (DPAs) for first-time homebuyers. These include grants (free money), forgivable loans (forgiven after 5-15 years of living in the home), low-interest second mortgages, and matched savings programs (IDA accounts). FHA loans require only 3.5% down, and some conventional loan programs accept 3% down for first-time buyers. VA loans offer 0% down for eligible veterans and service members.

Common Mistakes to Avoid

• Investing your down payment in stocks. If your timeline is less than 3 years, keep your down payment in a HYSA or CD, not the stock market. A market downturn of 20-30% could delay your home purchase by years. The guaranteed 4-5% from a HYSA is the appropriate risk level for short-term savings goals.
• Forgetting about closing costs. Your down payment is not your only upfront cost. Budget an additional 2-5% of the purchase price for closing costs (appraisal, title insurance, attorney fees, prepaid taxes, and insurance). On a $350,000 home, that is $7,000-$17,500 on top of the down payment.
• Draining your emergency fund. Never use emergency savings for your down payment. Maintain at least 3-6 months of living expenses in a separate, untouched emergency fund. Home ownership brings unexpected expenses (roof repairs, HVAC failures, plumbing issues) that require cash reserves.
• Not tracking your progress. Use this calculator monthly to track your savings trajectory. Seeing your progress (or lack thereof) helps you adjust your strategy in real time. Some savers find that visual tracking tools and regular check-ins keep them motivated and accountable.
• Waiting for the perfect market timing. Trying to time the housing market is rarely successful. If you have enough saved and find a home you love at a price you can afford, waiting for prices to drop further is a gamble. The cost of waiting (additional rent payments, potential price increases) often exceeds any savings from a market dip.