Down Payment Calculator

About the Down Payment Calculator

Most deposit calculators do a division. You need 20% of £320,000, you have £12,000, you save £800 a month, so it takes 65 months. Done.

That answer is wrong, and not by a little. It assumes the £64,000 you are aiming at stays £64,000 while you spend five years saving for it. If prices rise 4% a year it does not — it becomes £81,245, and the real answer is 73 months.

The target moves while you save. This calculator steps through month by month, growing your savings and the price together, and tells you when one actually overtakes the other. Sometimes the answer is that it never does, and that is a real finding rather than a failure.

How to Use the Down Payment Calculator

Enter the price today of the sort of property you want, and the deposit percentage you are aiming for.

Add what you have saved so far and what you are saving each month.

Then two rates. House price growth moves the target. Interest on your savings moves your pot. The relationship between those two numbers decides everything, as the last section explains.

Why the Target Moves

A deposit is a percentage of a price. Percentages of growing things grow.

  Today:        10% of 320,000  =  32,000
  In 27 months: 10% of 349,522  =  34,952

So you did not need to save £20,000 — the shortfall you started with. You needed to save £22,952, because the finish line moved £2,952 further away while you ran at it.

This is why saving for a deposit so often feels slower than the arithmetic says. The arithmetic most people do is against a fixed number.

At 4% growth the moving target costs you four extra months. On a longer save the effect compounds and gets much worse.

The 20% Threshold

The bigger the deposit, the further the target moves before you reach it:

Look at the 20% row. You are aiming at £64,000 and you will hand over £81,245 — 27% more than the figure you started planning against.

And yet 20% is usually still worth it. Crossing it removes mortgage insurance entirely and typically improves the rate you are offered, both of which run for the whole life of the mortgage. The last stretch of saving is worth considerably more per unit than the first, which is the opposite of how it feels while you are doing it.

The honest framing is that the 10% deposit gets you in 46 months sooner, and the 20% deposit gets you in cheaper for thirty years. Both are defensible. What is not defensible is comparing them without knowing the real numbers.

When You Never Catch Up

Here is the case ordinary calculators cannot express at all.

£320,000 property, 20% target, £12,000 saved, £300 a month, prices rising 8%, savings earning 1%.

The deposit you need grows by about £411.78 in the first month. You are saving £300. You are falling behind immediately.

The obvious response — "so save more than £412" — is wrong, and this is the part worth understanding. The target compounds and your contribution does not. At 8% growth the deposit needed rises by £411.78 a month now and about £889 a month ten years from now, while £412 a month stays £412 a month. Saving £900 — more than double the figure you were told to beat — still never arrives.

A fixed monthly sum cannot stay ahead of a compounding target indefinitely. Only three things actually close the gap:

• A larger deposit now, so you cross the line before the compounding dominates.
• Contributions that rise with prices, so your saving compounds too.
• A savings return nearer the growth rate, so your pot compounds at a

comparable pace.

That is why this calculator refuses to return a date rather than quoting a threshold that fails a year later.

Step-by-Step Example

£320,000 property, 10% deposit, £12,000 saved, £800 a month, 4% growth, 4% savings interest.

  Needed today:   10% × 320,000            =  32,000.00
  Shortfall:      32,000 − 12,000          =  20,000.00

  Each month:
    pot   = pot × (1 + 4%/12) + 800
    price = price × (1.04)^(1/12)
    target = 10% of price

Stepping forward until the pot overtakes the target:

  Month 27:
    pot     =  35,690.65
    price   = 349,522.38
    target  =  34,952.24      ← pot clears it

  Contributions:  27 × 800   =  21,600.00
  Interest at 4%:            =   2,090.65
  Actually saved:            =  22,952.24   (not 20,000)

The resulting mortgage is £314,570.14 at 90% loan-to-value — above the 80% threshold, so mortgage insurance would apply on top.

Understanding Your Result

Time to save it is the month your pot overtakes the target, not the month it reaches today's figure.

Deposit needed shows both numbers: what it is today and what it will be when you arrive.

Price by then is what the property will cost at your assumed growth rate.

Loan-to-value flags whether mortgage insurance would apply on the mortgage you would end up with.

Worth knowing compares your target against 20%, including what the extra saving would take and buy.

When Should You Use This Calculator?

At the start of saving. Knowing the target moves changes how much you decide to put aside.

Deciding between 10% and 20%. The table above is the real trade: months now against a better rate and no insurance for decades.

When you are not sure you are gaining ground. If prices are running ahead of you, this says so plainly.

Setting a monthly amount. On the 20% target, £500 a month takes 127 months and £1,200 takes 47 — the relationship is steeply non-linear, which is worth seeing.

Choosing where to keep the savings. The higher the growth you are saving against, the more the return on your pot matters.

Common Mistakes

Dividing the shortfall by the monthly saving. It ignores that the target moves and will understate the time, often substantially.

Assuming a bit more each month fixes a widening gap. Against a compounding target it does not. Only compounding contributions or a compounding return do.

Forgetting the costs of buying. Legal fees, survey and stamp duty or transfer tax come out of the same savings and are not in the deposit figure.

Aiming just under 20%. 19% attracts mortgage insurance exactly as 10% does. If you are close, the last percentage point is the most valuable saving you will do.

Keeping the deposit somewhere earning nothing. Over the 73 months of the 20% case, 4% interest covers nearly 16% of what you added. Over 27 months it covers under 9% — the longer the save, the more this matters.

Guessing the growth rate confidently. Nobody knows it. Try it at 0%, 4% and 6% and plan around the range rather than a single figure.

Reading this as a forecast. House price growth and savings rates both vary, and neither is predictable. Every figure here is an estimate for planning, not advice.