How much should I save for a down payment?

People type this into search every day: how much to save for a down payment.

The usual answer is “20 percent.” That is one conventional-loan checkpoint, not the whole cash you need before keys. Closing costs and prepaid items show up on the same day.

This page is a labeled example. It is not a lender quote, and it is not personalized financial advice.

The down payment is only the first line

The CFPB’s down payment note says the amount varies by the loan and the lender. A larger down payment usually means a lower rate and an easier approval. If you cannot put 20 percent down, lenders usually want private mortgage insurance, or an FHA, VA, or USDA loan.

The same page tells you to count more than the down payment. Points, closing costs, moving, and repairs that cannot wait all land around closing.

The home purchase cash to close calculator adds those pieces:

down payment + closing costs + prepaid items − credits

Closing costs are a percent of price. Actual lender and local fees vary. The CFPB’s determine your down payment page puts typical closing costs, not including the down payment, at 2% to 5% of the purchase price. The calculator default is 3%, inside that range.

The CFPB’s closing costs note lists appraisal, title insurance, taxes, and prepaid items as the usual fees. Their Closing Disclosure explainer calls the upfront bundle settlement costs and separates it from cash to close. Your Loan Estimate will print line items, not a single 3%.

The published $420,000 / 20% example

Here are the cash-to-close defaults:

• home price: $420,000
• down payment: 20%
• closing costs: 3%
• prepaid tax and insurance: $4,500
• credits or deposit already paid: $5,000

Down payment: 420000 × 0.20 = $84,000.00

Closing costs: 420000 × 0.03 = $12,600.00

Gross before credits: 84000 + 12600 + 4500 = $101,100.00

Estimated cash to close: 101100 − 5000 = $96,100.00

The rent vs buy post already prints this $96,100.00. It is the cash hurdle, not the five-year ownership cost.

Drop the $5,000 credit and cash to close is $101,100.00. The credit is a deposit already paid, a seller concession, or both. The CFPB cash-to-close guide on this tool says to enter an approved contribution, not a verbal promise.

20% is a PMI line, not a law

The CFPB home loan toolkit (August 2026 print) puts three checkboxes on the down payment page. 20% or more is the box that “likely provides the best rates and most options,” and it warns you if that pile drains every other account. 5% to 19% usually means PMI or a higher rate. Under 5% is the FHA 3.5% program, VA zero-down for qualifying veterans, or USDA zero-down in eligible rural areas.

HUD’s FHA loan page states the FHA down payment can be as low as 3.5% of the purchase price on 1–4 unit properties.

The CFPB PMI note says conventional loans with less than 20% down usually require private mortgage insurance. PMI protects the lender, not you. It often lands on the monthly payment. The mortgage payment calculator excludes it. A 5% or 3.5% path on that page is already missing a real line.

Keep the $420,000 price, 3% closing, $4,500 prepaid, and $5,000 credit. Change only the down payment percent.

• 3.5% down: down $14,700.00, cash to close $26,800.00
• 5% down: down $21,000.00, cash to close $33,100.00
• 10% down: down $42,000.00, cash to close $54,100.00
• 15% down: down $63,000.00, cash to close $75,100.00
• 20% down: down $84,000.00, cash to close $96,100.00

Closing costs stay $12,600.00 on every row. The down payment is what moves.

The editorial example on the cash-to-close tool is a $400,000 price, 15% down, 3% closing, $4,000 prepaid, $2,500 credits. Cash to close: $73,500.00. Down payment $60,000.00. Closing $12,000.00. I would run your listing through that card before I treated $96,100.00 as the only number.

The 5% card is the smaller cash hurdle on the same house. The monthly loan gets larger. Write both down.

The monthly payment moves with the down payment

The mortgage payment post uses the standard fixed-rate formula. Defaults: $420,000 price, $84,000 down, 6.25%, 30 years. Loan $336,000. Principal and interest $2,068.81. Total interest $408,771.53.

Keep 6.25% and 30 years. Change only the down payment. PMI stays out.

• 3.5% down ($14,700): loan $405,300, payment $2,495.50, total interest $493,080.65
• 5% down ($21,000): loan $399,000, payment $2,456.71, total interest $485,416.19
• 10% down ($42,000): loan $378,000, payment $2,327.41, total interest $459,867.97
• 20% down ($84,000): payment $2,068.81, total interest $408,771.53

3.5% versus 20% adds $426.69 a month and $84,309.12 of interest over the full term. 5% versus 20% adds $387.90 a month and $76,644.66 of interest.

Freddie Mac’s Primary Mortgage Market Survey for the week of October 8, 2026 put the 30-year fixed average at 7.40%. That is a national average from purchase applications, not your quote. On the default $336,000 loan it prints $2,326.40 a month and $501,502.61 of interest. The 6.25% default is the number the calculator ships with.

A 15-year term at 20% down and 6.25% prints $2,880.94 a month and $182,569.35 of interest. The payment jumps. The interest falls by $226,202.18 versus the 30-year default.

The monthly deposit is a different calculator

Once $96,100.00 is the target, the savings goal timeline post is the monthly loop. A closing date is a deadline, so start at 0% return. The CFPB savings plan worksheet does the same cash split: target divided by months.

The monthly budget planner leftover on its defaults is $900.00. That is 21.4% of the $4,200 take-home on that page. I would type that leftover before I promised a heroic deposit.

From $0, $96,100 target, $900 a month, 0%:

Time: 8 years 11 months

Final balance: $96,300.00

Growth: $0.00

Same $900 at 3.5%:

Time: 7 years 10 months

Final balance: $97,171.98

Contributed: $84,600.00

Growth: $12,571.98

The savings-goal post already printed that 3.5% path. Most of the pile is still money you deposited.

Pick the date first and the monthly number is a division. From $0:

• 24 months: 96100 ÷ 24 = $4,004.17 a month
• 36 months: 96100 ÷ 36 = $2,669.44 a month
• 48 months: 96100 ÷ 48 = $2,002.08 a month

$4,004.17 does not fit inside a $900 leftover. Either the date moves, the down payment percent falls, or the leftover has to rise.

Already have $20,000. Thirty-six months left. Gap: 96100 − 20000 = $76,100.00. Monthly cash: 76100 ÷ 36 = $2,113.89. Already funded: 20000 ÷ 96100 = 20.8%.

The same $20,000 with $900 a month at 0% needs 7 years 1 month and lands at $96,500.00. At 3.5% it shortens to 6 years, final $96,656.05, growth $11,856.05.

A 5% cash-to-close target of $33,100 from $0 at $900 a month is 3 years 1 month at 0% and 2 years 11 months at 3.5%. That is the smaller pile. The loan on that path is $399,000, not $336,000.

The CFPB emergency fund guide wants a cash buffer that is not the down-payment account. The emergency fund defaults need $18,900.00 for six months of essentials. The toolkit’s 20% checkbox says to think twice if the down payment empties every other pile. I would keep that $18,900 off the closing wire.

Closing costs at the edges of the CFPB 2% to 5% range, same 20% down and the default prepaid and credit:

• 2% closing: cash to close $91,900.00
• 5% closing: cash to close $104,500.00

That $12,600 swing is the 3-point gap on a $420,000 price. The down payment did not move.

Open the home purchase cash to close calculator with the listing price, the down payment percent you can fund, and a closing-cost percent inside 2% to 5%. Use the savings goal timeline for the monthly deposit, and run 0% next to any return you type. Use the mortgage payment calculator to see what that down payment does to principal and interest. Add PMI by hand if the down payment is under 20% on a conventional loan.