How it's calculated
Down payment = price × down %
Closing costs ≈ price × closing %
Cash to close = down payment + closing costs
Loan = price − down payment LTV = loan ÷ price
Closing costs ≈ price × closing %
Cash to close = down payment + closing costs
Loan = price − down payment LTV = loan ÷ price
Working backwards from your savings: max price = cash ÷ (down % + closing %).
Worked example
A $400,000 home with 10% down needs $40,000 down. Estimating closing costs at 3% adds $12,000, so you'd bring about $52,000 to closing and borrow $360,000 (90% LTV). Going the other way, $50,000 of savings at 10% down and 3% closing costs covers a price of about $384,615.
How much do you need to put down?
- Conventional loans: some programs allow as little as 3% down; 5% to 10% is common.
- FHA loans: 3.5% down with a credit score of 580 or more.
- VA and USDA loans: often 0% down for those who qualify.
- 20% down avoids private mortgage insurance (PMI) on a conventional loan and gives you a lower payment.
Under 20% down, a conventional loan usually adds PMI, which you can ask to remove once you reach 20% equity and which ends automatically at 22% based on the original schedule. FHA loans have their own mortgage insurance with different rules.
Limitations
- Closing costs vary a lot by state, lender and loan. Your Loan Estimate shows the real figure; 2% to 5% of the price is a common range to plan with.
- This shows what your cash covers, not what a lender will approve. Your income and debts set that: try the home affordability calculator.
- Keep an emergency fund and moving money aside. Lenders may also want to see reserves after closing.