Down Payment Savings Calculator
Estimate how long it will take to save for a down payment, or how much you need to save each month to reach your goal.
Formulas Used
Total Savings Goal:
Total Goal = (Home Price × Down Payment %) + (Home Price × Closing Costs %)
Future Value of Savings (compound interest + regular contributions):
FV = PV × (1 + r)n + PMT × [((1 + r)n − 1) / r]
Where: PV = current savings, r = monthly interest rate (annual rate ÷ 12), n = number of months, PMT = monthly contribution
Months to Reach Goal (solved analytically):
n = ln[(Goal − PMT/r) / (PV − PMT/r)] / ln(1 + r)
Required Monthly Contribution for a Fixed Timeline:
PMT = (Goal − PV × (1 + r)n) / [((1 + r)n − 1) / r]
Assumptions & References
- Savings grow at a constant annual rate, compounded monthly.
- Monthly contributions are made at the end of each month (ordinary annuity).
- A conventional loan typically requires a 20% down payment to avoid Private Mortgage Insurance (PMI); FHA loans require as little as 3.5% (HUD.gov).
- Closing costs typically range from 2%–5% of the home purchase price (CFPB).
- High-yield savings accounts and CDs currently offer 4%–5% APY (as of 2024–2025); returns are not guaranteed.
- This calculator does not account for taxes on interest income, inflation, or changes in home prices over time.
- Formula reference: Time Value of Money — Future Value of Annuity, CFA Institute.