How Much Down Payment Do I Need to Buy a House?
One of the first questions first-time buyers ask is: how much down payment do I need to buy a house? The short answer is less than you probably think. Depending on your loan type, you may qualify to buy a home with as little as 3% down — or even nothing down in some cases.
This guide breaks down every common down payment option, shows you real monthly payment examples at different price points, and explains what you actually gain by putting more money down. You do not have to save up 20% to become a homeowner.
Common Down Payment Amounts by Loan Type
There is no single required down payment amount. It depends on which loan program you use. Here are the most common options:
| Loan Type | Minimum Down Payment | Who It’s For |
|---|---|---|
| Conventional (Fannie/Freddie) | 3% | Buyers with good credit (620+) |
| FHA Loan | 3.5% (580+ credit score) | Buyers with lower credit scores |
| FHA Loan (lower credit) | 10% (500–579 credit score) | Buyers rebuilding credit |
| VA Loan | 0% | Veterans and active military |
| USDA Loan | 0% | Buyers in rural or suburban areas |
| Conventional (standard) | 5% – 10% | Buyers who want lower PMI costs |
| Conventional (no PMI) | 20% | Buyers who want to skip PMI entirely |
If you are not sure which loan fits your situation, see our full comparison at FHA vs. Conventional Loan for First-Time Buyers or read about FHA loan down payment requirements in detail.
What 20% Down Actually Gets You — and Why You Do Not Need It
The 20% myth has kept millions of people renting longer than they needed to. Here is the real story.
When you put 20% down on a conventional loan, you avoid Private Mortgage Insurance (PMI). PMI typically costs 0.5% to 1.5% of the loan amount per year, added to your monthly payment. On a $300,000 loan, that is $125 to $375 per month extra.
That sounds like a lot — and it is. But consider this: if a $300,000 home appreciates 5% next year, it is worth $315,000. You gained $15,000 in equity whether you put 3% down or 20% down. Many buyers are better off getting into a home sooner with a smaller down payment and paying PMI temporarily than waiting years to save 20%.
PMI is also not forever. On a conventional loan, you can request PMI removal once you reach 20% equity. It cancels automatically at 22% equity under federal law.
Bottom line: 20% is a goal, not a requirement. Do not let it stop you from buying.
How Down Payment Affects Your Monthly Payment — Real Examples
Let’s look at how much down payment you need to buy a house at three common price points, and how that choice changes your monthly payment. These examples assume a 7% interest rate on a 30-year loan and do not include taxes or insurance.
$250,000 Home
| Down Payment | Amount Down | Loan Amount | Monthly P&I | Est. PMI/Month | Total Monthly |
|---|---|---|---|---|---|
| 3% | $7,500 | $242,500 | $1,614 | ~$150 | ~$1,764 |
| 3.5% (FHA) | $8,750 | $241,250 | $1,606 | MIP ~$165 | ~$1,771 |
| 10% | $25,000 | $225,000 | $1,497 | ~$100 | ~$1,597 |
| 20% | $50,000 | $200,000 | $1,331 | None | $1,331 |
$350,000 Home
| Down Payment | Amount Down | Loan Amount | Monthly P&I | Est. PMI/Month | Total Monthly |
|---|---|---|---|---|---|
| 3% | $10,500 | $339,500 | $2,260 | ~$210 | ~$2,470 |
| 3.5% (FHA) | $12,250 | $337,750 | $2,248 | MIP ~$230 | ~$2,478 |
| 10% | $35,000 | $315,000 | $2,096 | ~$140 | ~$2,236 |
| 20% | $70,000 | $280,000 | $1,863 | None | $1,863 |
The gap between 3% and 20% on a $350,000 home is about $607 per month — but you are also keeping $59,500 more in your pocket at closing. That cash could cover moving costs, repairs, an emergency fund, or investments.
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Understanding PMI and MIP Costs
If you put less than 20% down on a conventional loan, you will pay PMI. If you use an FHA loan, you will pay Mortgage Insurance Premium (MIP). These are similar concepts but work differently.
PMI on Conventional Loans
- Typically 0.5% to 1.5% of the loan amount annually
- Added to your monthly mortgage payment
- Can be removed once you reach 20% equity
- Automatically cancels at 22% equity by federal law
- Cost depends on your credit score and down payment amount
MIP on FHA Loans
- Upfront MIP of 1.75% of the loan amount (can be rolled into the loan)
- Annual MIP of 0.55% for most borrowers, paid monthly
- Stays for the life of the loan if you put less than 10% down
- Cancels after 11 years if you put 10% or more down
The FHA lifetime MIP rule is an important one. If you take out a $250,000 FHA loan and plan to stay in the home for 20 years, you could pay MIP the entire time. Many buyers refinance to a conventional loan once they have built enough equity to escape MIP. See FHA loan requirements for 2026 for the full picture.
Down Payment Assistance Programs
You do not have to come up with your full down payment on your own. Thousands of down payment assistance programs exist across the country — and most people do not know about them.
These programs offer:
- Grants that do not have to be repaid
- Forgivable second loans (forgiven after a set number of years)
- Low-interest second loans to cover your down payment
- Matched savings programs through nonprofits and employers
Most programs are income-limited and require you to take a short homebuyer education course. Many are designed specifically for first-time buyers. See our complete breakdown at down payment assistance programs for 2026 and first-time home buyer grants by state.
You can also look into zero down payment home loans if saving a down payment is the biggest obstacle to buying.
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How to Save for a Down Payment
If you need to build your savings, here are the most effective strategies:
1. Open a Dedicated High-Yield Savings Account
Keep your down payment savings completely separate from your regular checking. A high-yield savings account earns 4% to 5% APY and removes the temptation to dip into the funds.
2. Automate Your Contributions
Set up an automatic transfer every payday. Even $200 per paycheck adds up to $5,200 in a year. You will not miss what you do not see.
3. Cut One Major Expense Category
Identify one spending category — dining out, subscriptions, entertainment — and redirect that money to your house fund. Small daily cuts matter, but cutting one major category moves the needle faster.
4. Direct Windfalls to the Account
Tax refunds, bonuses, and gifts should go straight into your down payment fund. A $3,000 tax refund is roughly 40% of a 3% down payment on a $250,000 home.
5. Ask About Gift Funds
Many loan programs allow family members to gift you money for a down payment. FHA and most conventional programs accept gift funds, though documentation is required. Ask your lender for the specifics.
6. Check Employer Benefits
Some employers offer homebuyer assistance as a workplace benefit. It is worth asking your HR department.
How Much Should You Actually Put Down?
There is no universal right answer. Here is a simple framework to decide:
- Put down the minimum if you have limited savings, want to buy soon, or your market is rising fast and waiting costs you appreciation.
- Put down 10% to 19% if you want to lower your monthly payment and reduce PMI costs without fully depleting your savings.
- Put down 20% if eliminating PMI is a priority, you have strong savings, and you will still have a solid emergency fund after closing.
Never drain your emergency fund to hit 20%. Going into homeownership with no financial cushion is riskier than paying PMI for a few years.
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Frequently Asked Questions
What is the minimum down payment on a house?
The minimum is 0% for VA and USDA loans, 3% for conventional loans, and 3.5% for FHA loans (with a 580+ credit score). The right minimum for you depends on your credit score and which loan you qualify for.
Is 20% down required to buy a home?
No. The 20% rule is a myth. Most first-time buyers put down 6% to 7%, according to the National Association of Realtors. You can buy with much less, though you will likely pay PMI or MIP until you build equity.
Can the seller pay my down payment?
No. Sellers can pay closing costs (called seller concessions), but they cannot cover your down payment. The down payment must come from you, a gift from a family member, or an approved assistance program.
How long does it take to save for a down payment?
It depends on your income, savings rate, and target home price. If you save $500 per month, you can reach a 3% down payment on a $250,000 home ($7,500) in about 15 months. Down payment assistance can cut that timeline significantly.
Does a bigger down payment lower my interest rate?
Sometimes. Lenders may offer slightly better rates when you put more down because it reduces their risk. However, the difference is usually small. Your credit score has a much bigger impact on your rate than your down payment percentage.
Ready to figure out how much home you can afford based on your down payment and income? See our guide at how much house can I afford or review the complete first-time home buyer checklist to see what comes next.