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How Much Do I Need To Save To Buy A House In Indiana?

Saving for a down payment to buy a house is one of the biggest hurdles to home ownership for first-time buyers. Use the following tips to figure out how much to you need to save and ways to reach your goal.

First things first. Let's calculate how much you need to save for a down payment.

Lenders offering conventional loans require a minimum 3% down payment up to 20% of the purchase price.

As of Q1 2022 in Indiana, the median listing price for homes is $192,000. Let's round up to $200,000 for easy math.

Percent of $200,000 Purchase Price

Down Payment Amount











As you can see, it's tempting to save for the minimum down payment, however there are some advantages of putting down 20% that may be important to you. Since you'll have more equity in the house, your monthly payments will be lower and you'll save much more interest over the life of the loan. You also won't be subject to private mortgage insurance (PMI) which can add $84-$166 per month to your payment on a $200,000 home. You'll see that saving $40,000 or more is completely achievable in two years time as the article continues.

Earnest Money

When you submit an offer to purchase a home, you'll need to submit a good faith deposit into an escrow account in order to validate the contract. The down payment amount is typically 1-3% of the purchase price and a higher deposit shows the sellers how interested you are. When you close on your new home, the earnest money is credited towards your down payment or closing costs.

Next, add closing costs and home inspection fees.

Closing costs are added on top of the down payment to cover the lender fees, document and recording fees, credit pulls, appraisal, title search and insurance fees. It generally cost 3-4% of the purchase price, so that adds $6,000 to $8,000 on a $200,000 home. Luckily, closing costs are typically shared with the sellers so you can negotiate a credit in the purchase agreement.

Lastly, add three months reserves and an emergency fund.

It would be disappointing to lose your homeownership dream because you had to rob your down payment savings fund for an unforeseen expense like medical or auto bills. Lenders also like to see a reserve cushion so you can freshen and furnish the house to your taste after you move in. Using a mortgage calculator like, will show that your monthly mortgage will be about $1,100 if you put 20% down to $1,500 for 3% down. That makes your reserve fund between $3,300 to $4,500.

So how much do you need to save to buy an average priced home in Indiana?

Percentage Of $200,000 Purchase Price

Total Amount Needed











Now that you have a ballpark figure of how much you need in order to buy a house, read on to find out how to set a fast-track budget to save $50,000 in two years, and money saving hacks to reach your goal.


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