How Much to Save for a House: A Month-by-Month Calculator

The down payment is the most visible target, but it's not the full number. Before you buy, you need the down payment, closing costs, and ideally 3-6 months of post-closing reserves. Underestimating this total is one of the most common first-time buyer mistakes.

Here's what you actually need to save, broken down by home price and down payment target.

The Three Components of Your Savings Target

Down payment: The percentage of the purchase price you pay upfront. Determines your loan size and whether you pay PMI.

Closing costs: Typically 2-5% of the loan amount, covering lender fees, title insurance, prepaid taxes/insurance, and other transaction costs.

Post-closing reserves: Cash you keep after closing. Most financial advisors recommend at least 3 months of full housing expenses. This protects against immediate repairs and job disruption.

Target Amounts by Down Payment Percentage

For a $400,000 home:

| Down Payment % | Down Payment | Loan Amount | Closing Costs (est.) | 3-Month Reserve | Total Needed | |----------------|--------------|-------------|----------------------|-----------------|--------------| | 3% (FHA) | $12,000 | $388,000 | $9,700 | $9,600 | $31,300 | | 5% (conventional) | $20,000 | $380,000 | $9,500 | $9,600 | $39,100 | | 10% | $40,000 | $360,000 | $9,000 | $9,600 | $58,600 | | 20% (avoid PMI) | $80,000 | $320,000 | $8,000 | $9,600 | $97,600 |

Reaching 20% down on a $400K home means saving $97,600. That's a significant goal. But it eliminates PMI (~$167/month on a $320K loan), which saves roughly $2,000/year.

Monthly Savings Needed

For a $400K home with 20% down ($97,600 target):

| Savings Timeline | Monthly Required (no interest) | Monthly Required (4.5% APY) | |------------------|-------------------------------|------------------------------| | 24 months | $4,067 | $3,950 | | 36 months | $2,711 | $2,625 | | 48 months | $2,033 | $1,960 | | 60 months | $1,627 | $1,560 |

Keeping savings in a high-yield savings account at 4.5% APY saves you roughly $100-$150/month in required contributions over 4-5 years.

Multi-Home Price Comparison

Monthly savings required to reach 20% down + closing costs + 3-month reserve in 36 months:

| Home Price | Total Target | Monthly Savings Needed | |------------|--------------|------------------------| | $250,000 | $61,000 | $1,640 | | $350,000 | $85,750 | $2,300 | | $400,000 | $97,600 | $2,625 | | $500,000 | $122,000 | $3,280 | | $600,000 | $146,400 | $3,935 |

If $2,625/month is too aggressive for your budget, a 5% down payment strategy cuts the $400K target to $39,100 and the monthly requirement to about $1,010 over 36 months. The trade-off is paying PMI until you reach 20% equity.

The FHA 3% Strategy

FHA loans allow 3.5% down (3% for some programs) with a 580+ credit score. This minimizes the cash barrier but has ongoing costs:

• FHA mortgage insurance premium (MIP): 0.55% of loan balance per year on a $388,000 loan = $178/month
• FHA also charges an upfront MIP of 1.75% added to the loan: $6,790

Unlike conventional PMI, FHA MIP stays on loans for the life of the loan if you put less than 10% down. To eliminate it, you must refinance into a conventional loan once you hit 20% equity.

Where to Keep Your Down Payment Savings

| Account Type | 2026 Yield | Pros | Cons | |-------------|-----------|------|------| | High-yield savings | 4.0-4.8% | FDIC insured, liquid | Rate variable | | 6-month Treasury bill | ~4.4% | Government-backed | Less liquid | | 12-month CD | ~4.2% | Fixed rate | Early withdrawal penalty | | Money market fund | 4.2-4.7% | Slightly higher yield | Not FDIC insured (SIPC) |

Keep the money safe and accessible. The stock market has no place in a 2-3 year savings goal — a correction the year before you buy could delay homeownership by years.

How to Accelerate the Timeline

Extra income: Every $500/month in extra income directed to savings cuts a 5-year timeline by 8-10 months.

Windfalls: Tax refunds, bonuses, and gifts go straight to the house fund. Even $5,000/year in windfalls cuts the timeline by 10-14 months on a $97K goal.

FHSA (if your state has one): A few states have created first-home savings accounts with tax deductions. Check your state's housing finance agency for current programs.

Gift from family: The IRS allows gift tax exclusions of $18,000 per person per year. Two parents giving $18K each = $36,000 toward your down payment without gift tax implications.

Run the Numbers

Use the CalcMoney Savings Goal Calculator to enter your target home price, down payment percentage, and timeline to get your personalized monthly savings target.