How Much Is the Down Payment for a $300,000 House?

Down payment options for a $300K house

How big of a down payment do you need for a $300K house? That’s going to depend entirely on the type of mortgage you choose.

While some may require no down payment at all, most will need at least 3% of the purchase price ($9,000) or 3.5% ($10,500). However, if you have a down payment of 20% ($60,000), you could potentially save a substantial amount on mortgage insurance and interest charges.

The key lies in choosing the down payment amount that aligns best with your circumstances. Read on to learn how to determine the optimal one for you.

In this article (Skip to...)

• Down payment options
• Minimum down payments
• Should you put 20% down?
• Down payment assistance
• Monthly mortgage payments
• Home affordability FAQ
• Choose your down payment

>Related: How to buy a house with $0 down: First-time home buyer

Down payment requirements for a $300K house

The down payment amount you’ll need depends on the type of mortgage loan you choose. Let’s take a closer look at how much you would need to put down for a $300,000 home with each of the five major loan programs:

1. Conventional loan: $9,000 (3% down). A loan that conforms to Fannie Mae and Freddie Mac’s guidelines, including a minimum credit score of 620
2. FHA loan: $10,500 (3.5% down). Backed by the Federal Housing Administration. Your credit score may be as low as 580 if you have a 3.5% down payment
3. VA loan: $0 (0% down). Only available to military service members and veterans who have reached minimum service thresholds. Surviving spouses may also apply
4. USDA loan: $0 (0% down). You need to purchase in a designated rural area and have a low-to-moderate income for the area where you’re buying
5. No-PMI conventional loan: $60,000 (20% down). If you want to avoid private mortgage insurance (PMI) you need 20% down. But you may find lenders that allow you to borrow a second mortgage to bridge the gap between your savings and that 20%. More on that below

Of course, all these are minimums. As a rule of thumb, the more cash you put down, the lower your interest rate is likely to be.

But even if you come up short of 3% or 3.5% down, you may have options.

Various down payment assistance programs (DPAs) are accessible across the country, offering grants or loans to assist you in meeting a portion or all your down payment needs. In some cases, these programs may even contribute to closing costs.

These valuable DPA programs can put homeownership within reach for first-time buyers who can easily afford mortgage payments but face challenges accumulating funds for the upfront costs.

What’s the minimum amount you can put down?

Each individual’s home buying journey is unique, and securing a suitable mortgage loan will largely depend on your financial situation. Lenders carefully assess factors such as credit score, gross monthly income, and overall debt obligations to determine your home loan eligibility.

We’ve already mentioned some of the restrictions on certain types of loans. But let’s take a deeper dive into the requirements for low- and zero-down mortgages.

1. VA loans ($0 down)

To get a zero-down VA loan (backed by the Department of Veterans Affairs), you need a Certificate of Eligibility (COE). The VA has strict guidelines governing its issuance.

Typically, veterans, active-duty service members, members of the National Guard, reservists, and certain surviving spouses are eligible for this type of loan.

Additionally, you’ll need to maintain an “acceptable” credit history. Some mortgage lenders are happy with a credit score of 580, but many prefer 620-660 or higher. If your credit score is lower, it is advisable to explore different lenders..

2. USDA loans ($0 down)

USDA mortgages are backed by the U.S. Department of Agriculture as part of its rural development program. Similar to a VA loan program, USDA loans allow for a 0% down payment, although you will still be responsible for covering the closing costs out of pocket.

To qualify for a USDA loan, you must purchase a property in a designated rural area. However, your occupation doesn’t have to be connected to agriculture in any way.

You must also have an annual income that’s low or moderate for the area where you’re buying. Not sure whether your income qualifies? Use this lookup tool to check your eligibility.

While the USDA doesn’t have a set credit score requirement, most lenders offering USDA-guaranteed mortgages require a score of at least 640. This credit score is necessary for automatic approval through the USDA’s automated underwriting system.

However, some USDA lenders might allow scores below 640 if there are compensating factors in place. These could include a lower debt-to-income ratio (DTI) or a more significant down payment.

3. Conventional loans ($9,000 down)

For those considering conventional mortgages, a conventional 97 loan allows for a minimal down payment of only 3% of the home’s purchase price. These loans are backed by Fannie Mae and Freddie Mac, the agencies responsible for establishing rules for conventional mortgages.

In case of a $300,000 home, that translates to a down payment of $9,000, which is the lowest possible unless you qualify for a zero-down-payment VA or USDA loan.

The minimum credit score requirement is 620 for a conventional loan. But it’s worth noting that individual lenders can impose higher minimums. If you find yourself being turned down with a score of 620, shop around for alternative lenders who may offer more flexible terms.

If you can qualify, conventional loans may be better than those from the FHA. That’s because they allow you stop paying private mortgage insurance (PMI) once your equity reaches 20 percent.

By contrast, FHA loans require ongoing mortgage insurance premiums (MIP) until you sell, refinance, or finish paying down your loan.

If you afford to make an initial down payment of at least 20% down on a conforming loan, you can avoid the need for PMI altogether.

4. FHA loans ($10,500 down)

When considering an FHA loan, the smallest down payment you can make is 3.5% — or $10,500 on a $300,000 home. That’s a bit higher than the down payment required for conventional loans.

As we mentioned, FHA loans require mortgage insurance premiums until you sell, refinance to a different type of loan, or simply pay the balance off, usually after 30 years.

So why do so many people choose FHA loans?

The main reason is because FHA allows credit scores as low as 580 (or 500, if you can put 10% down). This flexibility makes FHA loans an appealing option for those seeking a faster path to homeownership. And if you’ll move or refinance within the next few years, those mortgage insurance payments aren’t as big of a deal.

5. No-PMI conventional loans ($60,000 down)

Most conventional loans fall into the “conforming loan” category regulated by Fannie Mae and Freddie Mac. The minimum down payment requirement for these loans is 3%.

If you choose to make a down payment of 3% (or anything less than 20%), you’ll be paying PMI for at least a few years. But paying for PMI isn’t always a negative. In many cases, it’s better to pay PMI while you build home equity, rather than continuing to rent.

“FHA loans and programs like HomeReady have lower interest rates,” reminds Jon Meyer, The Mortgage Reports loan expert and licensed MLO. “So calculate the difference in total payments between different loan programs to see which makes more sense.”

The actual amount you will pay for private mortgage insurance (PMI) depends on factors such as your credit score and down payment. Your mortgage quotes, known as “Loan Estimates”, will provide an exact figure.

Some homeowners avoid PMI by using a conventional “piggyback loan" that allows them to put 10% down and borrow another 10% via a home equity loan. This combined down payment and second mortgage equal a 20% down payment, eliminating the need for PMI.

If cash isn’t an issue, you can go ahead and put 20% down right away. This equates to $60,000 out of pocket on a $300,000 home. By doing so, you can secure the lowest mortgage rate and significantly reduce both your monthly mortgage payments and your total interest costs.

Should I put 20% down on a $300K house?

When does 20% make sense as the down payment for a $300K house? The brief answer is: When you can afford it.

Putting down 20% on a home purchase earns you real advantages because:

• You avoid the need for private mortgage insurance (PMI)
• You’re likely to secure a lower mortgage rate compared to those with smaller down payments
• You’ll have lower monthly payments because you’re borrowing less. Your loan amount is $240,000 with 20% down as opposed to $291,000 with 3% down
• You’ll save a substantial amount over the term of the loan, resulting in a lower overall cost

A bigger down payment can also provide you with additional flexibility when qualifying for a mortgage. For example, suppose a lender wants a minimum credit score of 700. You might have some leeway with a score a few points below that if you’re putting 20% down.

Be patient and consider your options

Of course, relatively few first-time home buyers can scrape together 20 percent. And if you are unable to do so, it’s not a big deal. Monthly payments and home price inflation can help push up home equity to reach the 20% threshold, at which point you can stop paying mortgage insurance altogether.

There are valid arguments against putting down 20% on a new home. If you’re buying real estate mainly as an investment, there can be sound reasons to keep your down payment small. Additionally, if putting down 20% would deplete your savings, it’s often wiser to maintain some cash reserves for emergencies and inevitable moving expenses, such as furniture and repairs.

Down payment assistance

If you find yourself short on cash on a down payment for a $300K house, there are options available to help you. As mentioned earlier, down payment assistance (DPA) programs offer home affordability programs tailored to individuals with low to moderate household incomes.

There are thousands of these assistance programs across the country. Speak with your loan officer, real estate agent, or Realtor to find one in your area. Or if you’re in the early phases of your home buying journey, we’ve gathered DPA programs in every state just for you.

Each DPA program operates independently and establishes its own set of rules. So we can’t tell you exactly what assistance you may receive. However, it’s likely to fall into one of these categories:

• Low-interest loan that is repaid alongside your mortgage
• Forgivable loan that doesn’t have to be repaid if you remain in the home for a certain number of years
• Outright grant that never has to be repaid

Some DPAs may also contribute to your closing costs. And it’s worth noting that lenders are generally supportive of DPAs, as they are familiar with these programs and often approve them.

Gifts from family and friends

Still short on funds for a $300K house? Many lenders are usually accepting of cash gifts from family members to cover a down payment. However, it’s important to note that some are not OK with gifts from people who aren’t family members. Ask about your lender’s policy.

Keep in mind that there are guidelines associated with such gifts. The main one is that the money you receive must be a true gift and not a loan in disguise. To satisfy this requirement, your donor will have to provide a mortgage gift letter, explicitly confirming that the funds are a gift.

You’ll also need to document the transfer of funds. This involves showing the source of funds and the money leaving from your donor’s account to yours.

What’s the monthly payment for a $300K house?

At a 5% fixed interest rate, monthly payments for a $300K house might fall between $1,300 and $1,940. This is a rule of thumb, and your monthly housing payment will be determined by your credit score, the type of loan, and other financial factors.

We used The Mortgage Reports’ mortgage calculator to model the monthly payments on a $300K home. Using a 30-year fixed-rate loan at a 5% interest rate, here’s how much you might pay from month to month:

• VA loan payment: $1,935 — Zero down and a rate of 5% (no mortgage insurance)
• USDA loan payment: $1,775 — $1,715 and $60 mortgage insurance, with zero down and a rate of 5%
• Conventional loan payment: $1,877 — $1,562 and $315 private mortgage insurance, with 3% down and a rate of 5%
• FHA loan payment: $1,850 — $1,641 and $209 mortgage insurance, with 3.5% down and a rate of 5%
• 20% down conforming loan payment — $1,288: 20% down and a rate of 5% (no PMI)

Note: These examples include only loan principal and mortgage interest. they do not include additional housing costs, like property taxes, homeowners insurance, and homeowners association (HOA) dues because they vary from one region to the next.

You can use a mortgage calculator to model your own housing payments using today’s mortgage rates.

We’ve used the same mortgage interest rate (5%) for each example. However, it’s worth mentioning that different types of mortgage loans have varying rates. And mortgage rates may well have changed by the time you read this.

Furthermore, while we specified the minimum down payment for a $300K house in each case, you have the flexibility to input whatever amount you have saved as your down payment.

Home affordability FAQ

Choosing the right down payment amount for you

Phew! That was a lot of information. But you’re now much better equipped to make an informed decision about the most suitable mortgage option for your needs.

Of course, many home buyers will find it easy to narrow down their options. Because you can’t get a zero-down-payment loan unless you’re eligible for one. And you can’t get a Fannie or Freddie loan unless your credit score is 620 or better.

As importantly, you can’t duck mortgage insurance unless your savings add up to a 20% down payment or you qualify for a VA loan.

So many will find their choices whittled down to one by their financial circumstances. And those who still have two choices will have to pick with one eye on mortgage insurance and the other on monthly payments.

You can easily learn what your options are by getting a preapproval from a mortgage lender.