Down payments are commonly cited as one of the most misunderstood parts of the home-buying process, as potential homebuyers hold off shopping until they can put 20% down on a home.

HousingWire has covered the misconceptions in-depth, such as this article on 5 common down payment misconceptions.

But if reading about down payment myths isn’t enough, mortgage insurer MGIC created a calculator for home shoppers to see if they should buy now or wait.

MGIC designed the calculator to help mathematically show that waiting to save for a 20% down payment will likely cost prospective homebuyers.

“As mortgage professionals, we must help counter this misinformed idea. Let consumers know – especially those looking to buy their first home – that waiting to save up 20% is not the only option, and they may be better off buying a home today with a smaller down payment rather than waiting,” MGIC stated in a blog on the new calculator.

This example from MGIC helps break down the math:

Let’s assume someone is saving for a 20% down payment on a \$200,000 home. She has saved \$10,000 of the \$40,000 she needs for a 20% down payment and can add \$500 to savings each month – \$6,000 a year.

Our calculator will help her see she could buy a home with as little as 3% down, and the cost if she were to purchase today with 5% down (the amount she has available today).

It also shows that if home prices appreciate at 3% annually (the user can adjust that value), her future 20% down payment will need to be \$48,552 and take her more than 6 years to save.

During that time, she will have paid more than \$80,000 in rent while her home equity position would be more than \$72,000 had she bought 6 years ago.

The blog did caution that it is not trying to encourage prospective borrowers to buy homes before they are ready.

However, even these low down payment mortgages have misconceptions around them. For added research, check out these 6 myths about Freddie Mac's 3% down mortgage.