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One of the biggest questions first-time buyers ask is: how much money do I need to put down? The answer depends on the type of loan you choose. This guide explains your options and how to save for a down payment.
How Much Down Payment Do You Need?
The down payment amount depends on your loan type and credit score. Here is a quick overview:
| Loan Type | Minimum Down Payment | Credit Score Required |
|---|---|---|
| Conventional | 3% | 620+ |
| FHA | 3.5% | 580+ |
| FHA (lower score) | 10% | 500-579 |
| VA | 0% | Varies by lender |
| USDA | 0% | 640 typical |
Down Payment by Home Price
Here is what each down payment percentage looks like in real dollars:
| Home Price | 3% Down | 3.5% Down | 10% Down | 20% Down |
|---|---|---|---|---|
| $200,000 | $6,000 | $7,000 | $20,000 | $40,000 |
| $300,000 | $9,000 | $10,500 | $30,000 | $60,000 |
| $400,000 | $12,000 | $14,000 | $40,000 | $80,000 |
| $500,000 | $15,000 | $17,500 | $50,000 | $100,000 |
Is a 20% Down Payment Required?
No. A 20% down payment is not required. It is a common myth. The benefit of putting down 20% is that you avoid private mortgage insurance (PMI). But many buyers can purchase a home with as little as 3% down.
The trade-off is that a smaller down payment usually means:
- Higher monthly payments
- More interest paid over the life of the loan
- PMI or mortgage insurance costs
Down Payment Assistance Programs by State
Many states offer programs to help with down payments. These programs can provide grants (free money) or low-interest loans. Common types include:
- Deferred-payment loans: No payments until you sell or refinance
- Forgivable loans: Forgiven after a set period if you stay in the home
- Grants: Do not need to be repaid
- Matched savings programs: State matches your savings up to a limit
To find programs in your state, visit your state’s housing finance agency website or HUD.gov.
Examples of State Programs
- California: CalHFA offers up to 3% down payment assistance
- Texas: My First Texas Home provides 5% assistance
- Florida: Florida Housing offers up to $10,000
- New York: SONYMA programs help with down payment and closing costs
- Illinois: IHDAaccess offers up to $10,000 in grants
How to Save for a Down Payment
Here is a practical plan to save your down payment:
- Set a target date: Decide when you want to buy and work backward.
- Open a dedicated savings account: Keep your down payment separate from everyday money.
- Automate transfers: Set up an automatic transfer to your down payment account each payday.
- Cut one large expense: Reducing dining out, streaming services, or a gym membership adds up fast.
- Save bonuses and tax refunds: Put windfalls directly into your down payment fund.
- Look for extra income: Freelancing, selling items, or a side job can speed things up.
A high-yield savings account can help your down payment grow faster. Read our guide to the best savings account interest rates in 2026 to find a good option.
What About Closing Costs?
Do not forget about closing costs. These are fees you pay when the deal closes. They usually run 2% to 5% of the loan amount. On a $300,000 loan, that is $6,000 to $15,000.
Common closing costs include:
- Loan origination fee
- Appraisal fee
- Title insurance
- Attorney fees
- Prepaid taxes and insurance
Some sellers will pay closing costs as part of the deal. You can also ask your lender about rolling them into the loan.
Should You Put Down More Than the Minimum?
A larger down payment has real benefits:
- Lower monthly payment
- Less interest paid over time
- No PMI with 20% down on a conventional loan
- More equity from day one
- Better chance of approval if your credit is borderline
But there is a trade-off. Putting more money down means less cash for:
- Emergency fund
- Home repairs and improvements
- Moving costs
- Other financial goals
Most experts suggest keeping 3 to 6 months of expenses in savings even after you close on a home.
Can You Use a Personal Loan for a Down Payment?
Most mortgage lenders do not allow personal loans for down payments. The lender needs to verify the source of your funds. If you borrowed the money, it increases your DTI ratio and can disqualify you.
However, a personal loan could help with closing costs in some cases. Always check with your lender before using borrowed funds. See our list of the best personal loans of 2026 if you need to cover other pre-purchase expenses.
Savings Calculator: How Long to Save for a Down Payment?
Here is a simple way to estimate your timeline:
- Decide on your target home price
- Multiply by your down payment percentage
- Add estimated closing costs (2%-5% of loan amount)
- Subtract any gift funds or assistance
- Divide the total by your monthly savings rate
Example: $300,000 home, 3.5% down ($10,500) + $9,000 closing costs = $19,500 needed. Saving $800/month = about 24 months to close.
Frequently Asked Questions
What is the minimum down payment to buy a house in 2026?
The minimum is 0% for VA and USDA loans, 3% for conventional, and 3.5% for FHA loans with a 580+ credit score.
Can I buy a house with no down payment?
Yes, if you qualify for a VA or USDA loan. VA loans are for veterans and active-duty service members. USDA loans are for buyers in eligible rural and suburban areas.
Are down payment assistance programs free money?
Some are grants that do not need to be repaid. Others are low-interest loans or forgivable loans. Terms vary by program and state.
Does a bigger down payment lower my mortgage rate?
Often, yes. Lenders see a larger down payment as lower risk, which can result in a slightly better interest rate. The difference may be small, but it adds up over 30 years.
Can a family member give me money for a down payment?
Yes. Gift funds are allowed on most loan types. The giver must provide a signed gift letter stating the money is not a loan and does not need to be repaid.
Rates as of May 2026. Rates and terms change often. Check with each lender for the most current information.