How Much Should I Put Down For a New Home?

The amount put down on a home impacts your monthly payment, the type of loan you may qualify for, and your financial flexibility after you move in.

This down payment calculator is a tool that can help you explore different scenarios and find the right balance for your budget.

Home Price

Interest Rate

Loan Term (years)

Property Tax (% of home price/year)

Homeowners Insurance ($/year)

Mortgage Insurance (% of loan/year)

HOA Fees ($/month)

Your Ideal Down Payment Is

Putting down 20% is recommended to avoid costly Mortgage Insurance, which could save you $0 on your monthly payment.

Monthly Payment Comparison

Total Interest Paid Over Loan Life

How Much Should I Put Down On a House?

The traditional recommendation for an ideal down payment is 20%. However, depending on your personal financial situation and loan options it’s not always necessary or the best choice for every buyer. Our down payment calculator breaks down the numbers to show you how different amounts could impact your mortgage.

How To Use Our Down Payment Calculator

Input the following information into the calculator to see a detailed comparison of your options depending on how much you put down.

Home Price. The estimated purchase price of your new home.

Interest Rate. The cost of borrowing money from the lender, calculated as a percentage of the amount of the loan.

Term. The period of your home loan, generally measured in years. Mortgage loan terms are typically 15 to 30 years, but Pennymac is proud to offer flex terms. We offer terms of 16 years, 17 years, 18 years and more on most loans.

Property Tax. A tax assessed on real estate by the local government, typically based on the value of the property (including the land) you own.

Homeowners Insurance. Usually required by lenders, homeowners insurance provides protection against damage to your home and your personal belongings, as well as potential liability from events that occur on the property.

Mortgage Insurance. A protective fee, expressed as a percentage of the loan, that is typically required when your down payment is less than 20%. This is also known as Private Mortgage Insurance (PMI) on conventional loans or a Mortgage Insurance Premium (MIP) on FHA loans. Requirements for this fee can vary significantly depending on your loan type (Conventional, FHA, or VA).

HOA Fees. The mandatory, recurring fee paid to the Homeowners Association if your property is part of a planned community, condo, or co-op. This fee covers the maintenance, repairs, and insurance for shared amenities and common areas.

Finding the Right Balance: Understanding Your Results

Our down payment calculator provides a clear comparison to help you weigh your options. Your results will show you:

Monthly Payment Comparison: See how a larger down payment can lower your monthly principal and interest payment.
Total Interest Paid Over Loan Life: Compare the difference in total interest that will be paid over the life of the loan.

Once you have an idea of what works for your budget, a Pennymac Loan Expert can help you explore loan programs that match your chosen down payment.

Beyond the 20% Myth

To secure a home loan, lenders will consider your overall financial health, but you don't always need a 20% down payment. Some loan programs allow for as little as 3% down. For example:

Conventional loans are available with down payments as low as 3% for qualified buyers.
FHA loans, insured by the Federal Housing Administration, require as little as 3.5% down.
VA loans offer a $0 down payment option for eligible veterans, active-duty service members, and their families.

What's the Right Down Payment For Me?

The amount you can put down versus what you should put down might be two different numbers. It’s a balancing act between short-term cash availability and long-term savings.

A smaller down payment may allow you to get into a home sooner, instead of waiting to save a larger sum. You can also keep more cash on hand to use towards moving costs, home improvement, or other financial goals. However, borrowing a larger amount often means you will pay more total interest over the life of the loan, and your interest rate may be slightly higher.

Making a larger down payment provides significant financial advantages. Depending on your loan product (Conventional, FHA, or VA), a larger down payment could help you eliminate the need for monthly Mortgage Insurance. You also gain more immediate equity in your home, which offers greater protection if the property value declines, and you will ultimately pay less total interest over the life of the loan.

What Other Upfront Costs Are There?

Your down payment is the largest upfront expense, but it isn't the only one. Remember to budget for closing costs.

Closing Costs: These typically range from 2% to 6% of the home's purchase price and cover essential services like the appraisal, title search, loan origination fees, and more. While these costs are generally due at closing, you can often roll them into the loan amount or ask the seller to cover a portion, reducing the cash you need upfront.

Cash Reserves: Lenders often require you to prove you have liquid funds remaining after closing. These reserves—typically a few months' worth of mortgage payments—demonstrate your ability to pay your mortgage even if you experience a temporary financial setback.

When planning your down payment, always factor in these additional expenses to ensure you have enough cash to comfortably close on your new home and begin your life as a homeowner on solid financial footing.