How Long to Save a House Deposit in the US

Summary

This calculator determines how long it takes to save a down payment for a US home. The average US home price is $396,800, and while the conventional standard is 20% down ($79,360), many buyers put down less. According to NAR, the median first-time buyer down payment is just 8%, while repeat buyers average 19%.

How it works

The calculator simulates month-by-month savings growth with compound interest:

balance_n = balance_(n-1) x (1 + r) + monthly_contribution

It repeats until the balance reaches the target down payment. The monthly rate r = annual savings rate / 12.

US down payment requirements

A 20% down payment on the median US home of $396,800 is $79,360. At the minimum FHA requirement of 3.5%, it drops to just $13,888, though you pay mortgage insurance for the life of the loan.

Down payment assistance

Over 2,000 down payment assistance (DPA) programs exist across the US (Freddie Mac). These include state housing finance agency grants, forgivable second mortgages, employer-assisted housing programs, and community land trusts.

Worked example

$396,800 home, 20% down payment, $20,000 current savings, $1,200/month, 4.5% HYSA:

1. Target down payment: $396,800 x 20% = $79,360
2. Monthly rate: 4.5% / 12 = 0.375%
3. Month 1: $20,000 x 1.00375 + $1,200 = $21,275
4. Month 2: $21,275 x 1.00375 + $1,200 = $22,555
5. Continue month by month until balance reaches $79,360
6. Result: 45 months (3 years 9 months)
7. Total contributions: $20,000 + ($1,200 x 45) = $74,000
8. Interest earned: $79,360 - $74,000 = $5,360

Alternatively, with an FHA loan (3.5% down = $13,888), a buyer with $20,000 already saved could purchase immediately.

Key differences from other markets

• Zero-down options (VA and USDA loans) have no equivalent in the UK or Australia. UK lenders require a minimum 5% deposit, and Australian lenders typically require 5-20% (though the First Home Guarantee allows 5% with no LMI).
• No government savings bonus like the UK Lifetime ISA (25% match). US first-time buyers benefit instead from low-down-payment loan programs and the over 2,000 DPA programs nationwide.