How Much Should You Put Down on a House? A Complete Guide

This article is general educational information, not personalized mortgage, financial, or legal advice. Program rules, eligibility, and lender requirements change and vary by borrower, property, and lender. All dollar examples are hypothetical.

If you’re planning to buy, you’ve probably wondered how much money you need to save first. The answer to how much down payment for a house depends on the mortgage program, home price, credit profile, lender requirements, your savings, and your monthly budget.

You may be able to buy with less than 20% down, but a smaller down payment can mean mortgage insurance or higher borrowing costs, depending on the loan. This guide covers minimum requirements, examples at different percentages, the pros and cons of putting 20% down, closing costs and emergency savings, and programs that may help. It focuses on choosing a down-payment amount; for the complete upfront budget, see our guide to how much money you need to buy a house. Nothing here guarantees you’ll qualify for any loan.

How Much Down Payment Do You Need to Buy a House?

It depends on the loan type, lender requirements, purchase price, and your eligibility. Some qualifying conventional loans allow as little as 3% down. FHA loans can require as little as 3.5% for eligible borrowers. Eligible VA and USDA borrowers may qualify for financing with no down payment under program rules.

These are not universal offers. Eligibility, lender requirements, property rules, and other conditions apply. The CFPB explains how down payment size can affect your loan terms.

• Program minimums vs. lender requirements. A program may allow a low down payment, but a lender can set stricter standards.
• Required vs. ideal. The minimum you’re allowed to pay isn’t necessarily what you can comfortably afford.
• Loan size. A larger down payment generally reduces the amount you borrow.
• Other cash needs. Closing costs, moving expenses, and emergency savings are separate from your down payment.

Is a 20 Percent Down Payment Required?

No. A 20 percent down payment is not a universal requirement for buying a home in the United States.

The 20% figure is widely discussed because it reduces the loan amount and may help you avoid private mortgage insurance (PMI) on many conventional mortgages. FHA mortgage insurance follows different rules, discussed below. Many eligible buyers get mortgages with lower down payments, and a smaller down payment may leave more money for emergencies and other expenses.

Avoiding PMI doesn’t automatically make 20% the best choice for everyone. Compare total loan costs, monthly payments, and your remaining cash under several scenarios before deciding.

Down Payment Examples for Different Home Prices

Hypothetical home prices. Not every program permits every percentage, and not every buyer qualifies for a given down payment.

Home Price	3% Down	3.5% Down	5% Down	10% Down	20% Down
$200,000	$6,000	$7,000	$10,000	$20,000	$40,000
$300,000	$9,000	$10,500	$15,000	$30,000	$60,000
$400,000	$12,000	$14,000	$20,000	$40,000	$80,000
$500,000	$15,000	$17,500	$25,000	$50,000	$100,000

These figures cover only the down payment, not the full amount needed at closing.

Minimum Down Payment by Mortgage Type

Conventional Loans

Certain eligible conventional loan programs may allow down payments as low as 3%, including some offered through Fannie Mae and Freddie Mac. The minimum depends on the loan program, how you’ll use the property, your eligibility, and the lender. Not all conventional loans offer 3% down.

PMI commonly applies to conventional loans with less than 20% down. A larger down payment may also affect your loan pricing and borrowing costs.

FHA Loans

FHA loans are insured by the Federal Housing Administration. Eligible borrowers may qualify for a minimum down payment of 3.5%, and other eligibility requirements apply.

FHA mortgage insurance has different rules from conventional PMI. FHA loans generally involve both an upfront and an ongoing (annual) mortgage insurance premium. Don’t assume FHA mortgage insurance disappears once you reach 20% equity. Duration can depend on the loan terms, including your original down payment. Assess the overall cost using the current requirements on HUD’s site and from your lender.

VA Loans

Eligible veterans, service members, and certain other qualifying individuals may have access to VA-backed purchase loans. Many eligible VA purchase loans allow no down payment when program and lender conditions are met. Borrowers must meet eligibility and entitlement requirements.

A VA funding fee may apply unless you qualify for an exemption. Having no down payment doesn’t mean having no closing costs or other expenses. See the VA’s home loan information.

USDA Loans

Eligible buyers may qualify for USDA-backed home loans with no down payment. Property location and borrower eligibility matter, and income, occupancy, and other conditions apply. Guarantee fees and other loan costs must be considered. See USDA’s single-family housing programs.

Low-Down-Payment Programs and Assistance

State and local housing agencies, nonprofits, and some mortgage programs may offer help to eligible buyers. Common forms include:

• Grants
• Forgivable loans
• Deferred-payment loans
• Other qualifying assistance arrangements

Availability, income limits, purchase-price limits, property requirements, repayment terms, and eligibility vary. Not every buyer qualifies.

What Are the Benefits of Putting 20% Down?

A Smaller Mortgage Balance

For the same purchase price, a larger down payment means you borrow less.

Lower Monthly Principal and Interest Payments

Borrowing less generally lowers principal-and-interest payments when other loan terms are equal. Property taxes, homeowners insurance, mortgage insurance, association fees, and other costs also affect your total monthly housing payment.

Potentially Lower Borrowing Costs

The down payment can affect mortgage pricing and loan costs, depending on the lender and program. A 20% down payment doesn’t always secure the lowest possible rate.

Potential to Avoid Conventional PMI

Putting 20% down commonly allows borrowers to avoid PMI on many conventional mortgages, subject to loan terms. FHA and other government-backed mortgage insurance arrangements follow different rules.

More Initial Home Equity

Your down payment establishes your starting equity. Changes in property value, transaction costs, and mortgage repayment all affect your overall equity over time.

What Are the Disadvantages of Putting 20% Down?

• It may take longer to save.
• A larger down payment leaves less cash for emergencies.
• You may need funds for repairs, moving, furnishings, and other immediate expenses.
• Money in home equity can be difficult or costly to access.
• Using all your savings can create financial strain.

A smaller down payment may be worth evaluating if you can comfortably afford the mortgage and keep adequate savings. Don’t buy before you’re financially prepared.

How Much Should You Put Down on a House Based on Your Savings?

The CFPB offers guidance on how to determine your down payment. Here’s a step-by-step method.

Step 1: Calculate your available savings. Identify what’s actually available for the purchase. Don’t assume every dollar can be spent.

Step 2: Set aside an emergency fund. Keep enough accessible savings for unexpected expenses. A three-to-six-month expense reserve is a common planning guideline, not a requirement for every household.

Step 3: Estimate closing costs. The CFPB says closing costs typically range from 2% to 5% of the purchase price, excluding the down payment, though actual costs vary.

Step 4: Budget for moving and immediate home expenses. Include moving costs, utility setup, furnishings, inspections, and repairs you may need soon after purchase.

Step 5: Compare mortgage options. Ask lenders for estimates at different down payment amounts.

Step 6: Review the monthly payment. Consider principal, interest, property taxes, homeowners insurance, mortgage insurance, and any association fees. The CFPB’s guide to figuring out how much you want to spend can help.

Step 7: Choose a sustainable amount. The best down payment isn’t necessarily the largest one you can make. Weigh upfront costs against your ability to handle ongoing expenses.

Down Payment vs. Closing Costs: What’s the Difference?

• A down payment is the part of the purchase price you pay upfront instead of borrowing.
• Closing costs are separate expenses for completing the transaction and obtaining the mortgage.

Closing costs can include:

• Lender fees
• Appraisal fees
• Title-related charges
• Recording fees
• Prepaid property taxes and insurance
• Other transaction-specific charges

Exact costs depend on the location, loan, lender, property, and transaction.

Hypothetical example ($300,000 home):

• 5% down payment: $300,000 × 0.05 = $15,000
• Closing costs at an assumed 3% of price: $300,000 × 0.03 = $9,000
• Combined: $15,000 + $9,000 = $24,000, before other potential costs or credits

The 3% closing-cost figure is only an illustrative assumption, not a guarantee of actual costs.

How Does Your Down Payment Affect Your Monthly Mortgage Payment?

A bigger down payment shrinks the loan. Using a hypothetical $300,000 home:

Down Payment	Down-Payment Amount	Mortgage Amount Before Other Adjustments
3%	$9,000	$291,000
5%	$15,000	$285,000
10%	$30,000	$270,000
20%	$60,000	$240,000

Your actual payment also depends on the interest rate, loan term, mortgage insurance, property taxes, homeowners insurance, and other costs.

Illustration only. The assumptions are a 6.5% fixed interest rate and a 30-year term. This is a hypothetical rate, not a current market quote. The figures show principal and interest only, with taxes, insurance, mortgage insurance, and fees excluded:

Down Payment	Loan Amount	Approx. Monthly Principal and Interest
3%	$291,000	about $1,839
5%	$285,000	about $1,801
10%	$270,000	about $1,707
20%	$240,000	about $1,517

Under these assumptions, the 20% scenario is about $322 per month lower than the 3% scenario in principal and interest. Real quotes can differ, because loan pricing and mortgage insurance often change with down payment size.

How Does a Down Payment Affect Mortgage Insurance?

Mortgage insurance generally protects the lender or program, not you. It is not the same as homeowners insurance.

• Conventional PMI: Lenders commonly require it with less than 20% down, and it adds to your monthly cost. Cancellation and termination rules depend on your loan and applicable law, so ask your lender how and when PMI can end. The CFPB has consumer guidance on this.
• FHA: Involves upfront and ongoing premiums under different rules from conventional PMI. See HUD.
• VA and USDA: Have their own program-specific fees, such as the VA funding fee and USDA guarantee fees, instead of conventional PMI.

Not every low-down-payment mortgage has the same insurance requirements, so compare the costs for each option you’re considering.

Common Down Payment Mistakes to Avoid

1. Assuming 20% down is mandatory. Fix: Ask lenders about lower-down-payment options you may qualify for.
2. Using all your savings. Fix: Keep an emergency reserve.
3. Forgetting closing costs. Fix: Budget for them separately, and check your Loan Estimate.
4. Ignoring moving expenses and immediate repairs. Fix: Set aside a cushion for the first months of ownership.
5. Choosing a down payment without checking the monthly payment. Fix: Calculate the full monthly cost at each scenario.
6. Assuming the smallest down payment is always best. Fix: Compare total costs, including mortgage insurance and interest.
7. Failing to compare loan programs. Fix: Get estimates for conventional, FHA, VA, or USDA options where eligible.
8. Ignoring mortgage insurance and other fees. Fix: Ask for an itemized breakdown.
9. Assuming advertised assistance is available to everyone. Fix: Check income limits, price limits, and repayment terms.
10. Buying a more expensive home because a lender offers a larger loan. Fix: Base your budget on your own finances, not the maximum approval.

How to Choose the Right Down Payment for Your Situation

Compare these factors across scenarios:

• Monthly affordability
• Total loan costs
• Mortgage insurance
• Savings remaining after closing
• Expected maintenance and repair costs
• Other financial priorities
• Loan-program eligibility
• The risk of unexpected expenses

A smaller down payment may preserve savings but increase borrowing costs. A larger one may lower your mortgage balance but leave less cash for other needs. There is no single right percentage.

Compare multiple Loan Estimates from different lenders. If you want help understanding your options, consider speaking with a HUD-approved housing counselor.

Frequently Asked Questions

1. How much down payment do I need for a house?

It depends on the loan program, lender, price, and your eligibility. Some conventional loans allow as little as 3%, FHA loans as little as 3.5%, and some VA and USDA loans require none for eligible buyers.

2. Is 20% down required to buy a house?

No. A 20% down payment may help avoid PMI on many conventional loans, but many buyers purchase with less.

3. Can I buy a house with 3% down?

Possibly. Certain eligible conventional programs allow it, subject to eligibility, lender rules, and property requirements.

4. Can first-time homebuyers buy a house with 3.5% down?

Eligible borrowers may qualify for FHA loans with 3.5% down. FHA loans aren’t limited to first-time buyers, and other requirements apply.

5. Can eligible buyers purchase a house with no down payment?

Some eligible VA and USDA borrowers can, under program and lender rules. Closing costs and fees may still apply.

6. How much is a 10% down payment on a $300,000 house?

$30,000 ($300,000 × 0.10).

7. Is it better to put 5% or 20% down on a house?

It depends. 20% reduces the loan and may avoid PMI, while 5% preserves cash. Compare monthly payments, mortgage insurance, and your savings in both scenarios.

8. Do I have to pay PMI if I put less than 20% down?

On many conventional loans, yes. Government-backed loans have their own insurance or fee structures. Ask your lender what applies to you.

9. Should I use all my savings for a down payment?

Generally no. Keep funds for closing costs, moving, repairs, and emergencies.

10. Are closing costs included in the down payment?

No. They’re separate expenses, though some programs or negotiations may offer credits or assistance.

Final Thoughts

How much down payment for a house is right for you depends on the home price, mortgage program, loan costs, monthly budget, and how much savings you’ll have left. Twenty percent down isn’t mandatory for every mortgage, but a smaller down payment may increase certain borrowing costs, including mortgage insurance.

Compare loan options, calculate your total upfront expenses, and keep a reasonable emergency reserve. For more help, explore our other first-time homebuyer and mortgage guides.