How Much Do I Need to Save to Buy a House?

The target is more than the down payment

The number most buyers fixate on is the down payment, but the deposit alone rarely covers what you actually pay on completion day. Lenders and sellers expect the down payment in cash, and on top of it come closing costs: appraisal, loan origination, title work, legal fees, and transfer taxes. Together these usually run 2% to 5% of the purchase price, so a $300,000 home can carry $6,000 to $15,000 in costs beyond the deposit itself.

There is also life after the keys. A prudent target includes a moving allowance, immediate repairs or appliances, and a cash cushion so an empty savings account does not greet you the week you move in. Building all of this into one figure keeps the goal honest and stops the last-minute scramble that pushes many buyers into a smaller deposit than they intended.

Turning the target into a monthly habit

Once you know the target and your deadline, the monthly figure is simple division — but two levers change it. A longer runway spreads the same target over more months, and interest on your savings does part of the work for you. Parking the money in a high-yield savings account or short-term deposit at even 3% to 4% can shave a meaningful slice off the monthly contribution over several years.

Automating the transfer the day after payday turns the plan into a default rather than a decision. If the monthly number feels out of reach, adjust the inputs deliberately: a smaller down payment percentage, a longer timeline, or a lower price bracket. Seeing those trade-offs on screen beats abandoning the goal because a single big number looked impossible.

A worked example from target to payment

Take a $300,000 home with a 20% target. The down payment is $60,000, closing costs at 4% add $12,000, and a $5,000 buffer for moving and immediate needs brings the goal to $77,000. If you have $12,000 saved already, the remaining target is $65,000. Over a five-year, 60-month horizon that is roughly $1,083 a month with no interest.

Now add a 4% return on your growing balance and the required monthly contribution falls to roughly $980, because the interest quietly closes part of the gap. Shorten the timeline to three years and the monthly figure jumps above $1,700 — the same target, a very different pace. That sensitivity is exactly why it pays to test a few scenarios before committing to a plan.

Frequently asked questions

Should my savings target include closing costs?

Yes. Closing and purchase costs of 2% to 5% of the price are paid in cash on completion, so leaving them out understates your real target by thousands of dollars. Always budget them alongside the down payment.

Is 20% down always required?

No. Many loans allow less, sometimes as little as 3% to 10%, but a smaller down payment usually means mortgage insurance or a higher rate. Twenty percent is a target that avoids those extra costs, not a legal minimum.

Where should I keep the money while I save?

For a goal within a few years, keep it in a high-yield savings account or short-term deposit, not the stock market. Capital you will need soon should not be exposed to a downturn just before you buy.

What if the monthly amount is too high?

Adjust one input at a time: extend the timeline, lower the down payment percentage, or target a cheaper home. The calculator shows how each change moves the monthly figure so you can find a plan you can actually sustain.