How much should you put down on a house?
Deciding how much should I put down on a house is a crucial question for many buyers, but the good news is there’s no one-size-fits-all answer.
The amount you need to put down will depend on a variety of factors, including the loan type and your financial goals. If you don’t have a large down payment saved up, don’t worry—there are plenty of options available, and you don’t need to put down the traditional 20%.
In fact, many homebuyers are able to secure a home with as little as 3% or even no down payment at all. So, if you’re asking yourself, “how much down payment for a house is ideal?” know that there are solutions that allow you to buy the home of your dreams without draining your savings.
Check your current home-buying options. Start hereIn this article (Skip to...)
- Putting 20% down
- Minimum down payments
- Deciding on down payment
- Benefits of a large down payment
- Benefits of a small down payment
- FAQ
>Related: How to buy a house with $0 down: First-time home buyer
What is a down payment?
In real estate, a “down payment” is the amount of cash you pay upfront toward the purchase of a home. Down payments vary in size and are typically expressed as a percentage of the purchase price. For example, a 10% down payment on a $400,000 home is $40,000. Similarly, if you put $12,000 down on that same home, then your down payment would be 3%.
Check your down payment options. Start hereThe term “down payment” exists because very few first-time home buyers opt to pay for homes using cash. Instead, many use a mortgage loan to finance the purchase of a home. An estimated 74% of all home buyers used a mortgage loan to buy a home, according to the National Association of Realtors 2024 Home Buyers and Sellers Generational Trends report.
Lenders require a down payment for most mortgage loans, but certain types of government-backed loan programs do not require buyers to put down any money at all.
Do you need to put 20% down on a house?
Contrary to what you may have heard, there is no requirement for a 20% down payment when purchasing a home. With a 20% down payment, lenders won’t require mortgage insurance on a conventional loan.
Check your current home-buying options. Start hereYou can, however, buy a house with a lower down payment. In fact, the National Association of Realtors reported in 2024 that the median down payment for first-time home buyers was just 9%.
This shows that many buyers are able to purchase homes without putting down the full 20%.
Minimum down payment requirements
When deciding how much down payment for a house is right for you, it’s important to understand that the amount you’ll need to pay upfront can vary based on the type of loan you choose.
Different mortgage options come with different down payment requirements, so selecting the right loan for your financial situation will help determine how much you need to save.
Check your current home-buying options. Start here| Loan type | Minimum down payment required |
| Conventional | 3% |
| FHA | 3.5% (with a credit score of at least 580) 10% (with a credit score of 500-579) |
| VA | 0% |
| USDA | 0% |
| Jumbo | 5-10% |
| Second homes or investment properties | Varies |
Conventional Loans
Conventional loans typically require a down payment of 3-5%. Programs like Fannie Mae’s HomeReady and Freddie Mac’s HomePossible offer as low as 3% down. Conventional loans can be fixed-rate or adjustable-rate (ARM), with fixed-rate loans offering predictable payments, while ARMs can fluctuate over time.
FHA Loans
FHA loans require a minimum down payment of 3.5% for borrowers with a credit score of 580 or higher. Those with lower scores (500-579) must put down 10%. FHA loans also require mortgage insurance premiums (MIP), which can be costly over time.
VA Loans
VA loans, available to veterans and service members, require no down payment and no ongoing mortgage insurance. However, they do have a one-time funding fee, typically between 1.4% and 3.6% of the loan amount.
USDA Loans
USDA loans for rural and suburban areas don’t require a down payment, as long as the borrower meets income and eligibility requirements. These loans are ideal for those looking for homes in qualifying rural areas.
Jumbo Loans
Jumbo loans, for amounts exceeding conforming loan limits, typically require a down payment of at least 5%. They come with stricter requirements due to the higher loan amount.
Second Homes and Investment Properties
Second homes usually require a 10-20% down payment, as they are seen as higher risk. Investment properties typically require 20% or more down, as they are purchased solely for income generation, not personal use.
How much should you put down on a house?
If you can afford it, putting 20% down on a house is ideal. It helps you avoid private mortgage insurance (PMI), reduces your loan amount, and lowers monthly payments. However, many home buyers wonder how much down payment for a house is right for them, especially with home prices continuing to rise.
If 20% down would deplete your savings, consider a smaller down payment. You might be better off with 10%, 3%, or even zero down, allowing you to keep money in reserve for emergencies, home repairs, or new furniture.
Ultimately, how much down payment for a house you bring depends on your financial situation. Be sure to explore all your down payment options and consult your real estate agent for advice on local market trends.
Check your down payment options. Start here
Benefits of a larger down payment
It takes time to save enough money for a substantial down payment, so a zero- or low-down-payment loan may hasten your ability to buy a home. But there are benefits to making a large down payment.
Check your down payment options. Start here- Lower interest rates: A larger down payment reduces lender risk, often resulting in better interest rates.
- Lower monthly mortgage payments: Financing a smaller portion of the home’s price leads to lower monthly payments, making it easier to manage your budget.
- No mortgage insurance: Putting 20% or more down can eliminate the need for private mortgage insurance (PMI), saving you money over time.
- More equity in the home: A bigger down payment means more equity right away, offering financial security and flexibility for future decisions like refinancing or selling.
- Lower debt-to-income ratio: A larger down payment reduces your monthly mortgage payment, improving your debt-to-income ratio and making it easier to qualify for future loans.
- Competitive edge in a seller’s market: A large down payment can make your offer more attractive to sellers, especially in a competitive housing market.
- Afford more home: With a larger down payment, you can afford a more expensive home while keeping your monthly payments the same.
Here’s how much house the home buyer in this example can purchase with a 4% mortgage rate. The price of the home varies with the amount the buyer puts down.
| Down Payment (%) | Down Payment ($) | Monthly Payment (Principal & Interest / PMI) | Home Price You Can Afford |
| 3% | $4,640 | $884 / $116 | $154,500 |
| 5% | $8,780 | $896 / $104 | $175,500 |
| 10% | $91,310 | $913 / $87 | $193,000 |
| 20% | $52,370 | $1,000 / $0 | $261,500 |
Even though a bigger down payment can help you afford a larger home loan, by no means should home buyers tap their emergency funds to stretch their down payment level.
Benefits of a smaller down payment
A smaller down payment can offer several advantages when purchasing a home:
Check your eligibility for a low-down-payment loan. Start here- Buy a home sooner: With a smaller down payment, you can enter the housing market faster, which can be especially helpful for first-time homebuyers or those with limited savings.
- Potential for property appreciation: By buying a home earlier, you can benefit from property value increases, growing your equity over time, even if you have a smaller down payment.
- Money leftover for home improvements: Saving more for home repairs and renovations can reduce financial strain after purchasing your home.
- Flexibility in cash reserves: A smaller down payment lets you maintain an emergency fund for unexpected expenses, providing financial security.
- Higher rate of return: With a smaller down payment, your return on investment (ROI) can be significantly higher. For example, a 3% down payment on a $400,000 home could result in a 167% ROI, compared to 25% with a 20% down payment, despite higher monthly costs from interest rates and PMI.
FAQ: How much down payment for a house do you need?
Check how much down payment for a house you'll need. Start hereYou do not have to put 20 percent down on a house. In fact, the average down payment for first-time buyers is between eight and 13 percent. There are also loan programs that let you put as little as zero down. However, a smaller down payment means a more expensive mortgage over the long term. With less than 20 percent down on a house purchase, you will have a bigger loan and higher monthly payments. You’ll likely also have to pay for mortgage insurance, which can be expensive.
The 20 percent down rule is really a myth. Typically, mortgage lenders want you to put 20 percent down on a home purchase because it lowers their lending risk. It’s also a rule that most programs charge mortgage insurance if you put less than 20 percent down (though some loans avoid this). But it’s not a rule that you must put 20 percent down. Down payment options for major loan programs range from zero to three, five, or 10 percent.
It’s not always better to make a large down payment on a house. When it comes to making a down payment, the choice should depend on your own financial goals. It’s better to put 20 percent down if you want the lowest possible interest rate and monthly payment. But if you want to get into a house now and start building equity, it may be better to buy with a smaller down payment—say five to 10 percent down. You might also want to make a small down payment to avoid draining your savings. Remember, you can always refinance to a lower rate with no mortgage insurance later on down the road.
It’s possible to avoid PMI with less than 20 percent down. If you want to avoid paying mortgage insurance premiums, look for lender-paid mortgage insurance, a piggyback loan, or a bank with special no-PMI loans. But remember, there’s no free lunch. To avoid PMI, you’ll likely have to pay a higher interest rate. And many banks with no-PMI loans have special qualifications, like being a first-time or low-income home buyer.
The biggest benefits of putting 20 percent down on a house are a smaller loan size, lower monthly payments, and no mortgage insurance. For example, imagine you’re buying a house worth $300,000 at a four percent interest rate. With 20 percent down and no mortgage insurance, your monthly principal and interest payment comes out to $1,150. With 10 percent down and mortgage insurance included, payments jump to $1,450 per month. Here, putting 20 percent down instead of 10 saves you $300 per month.
It is absolutely okay to put 10 percent down on a house. In fact, first-time buyers put down only 13 percent on average. Just note that with 10 percent down, you’ll have a higher monthly payment than if you put 20 percent down. For example, a $300,000 home with a four percent mortgage rate would cost about $1,450 per month with 10 percent down and just $1,150 per month with 20 percent down.
The biggest drawback to putting 10 percent down is that you’ll likely have to pay mortgage insurance. Though if you use an FHA loan, a 10 percent or higher down payment shortens your mortgage insurance term to 11 years instead of the full loan term. Or you can put just 10% down and avoid mortgage insurance with a piggyback loan, which is a second, smaller loan that acts as part of your down payment.
Bottom line: How much down payment for a house do you need?
Discovering how much down payment for a house you require can be a revelation for many home buyers. It’s often surprising to learn that you can afford a home with the savings you currently have.
Furthermore, if your funds are insufficient for the down payment and closing costs, down payment assistance programs may be available to you. Therefore, it’s important not to delay your home buying plans simply because you haven’t saved up a 20% down payment.
In fact, many potential buyers have the qualifications to purchase a home right now without realizing it.
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