How Much Is a Down Payment on a House?
Everything you need to know about down payment amounts, minimums by loan type, and strategies to buy sooner.
The question of how much is a down payment on a house worries more Americans than almost any other part of the home buying process. Many believe they need 20% down, but that has not been the reality for decades. Today, you can buy a home with as little as 0% to 3.5% down depending on your loan type.
According to the National Association of Home Builders, the median down payment for all home buyers is approximately 15%. First-time buyers put down even less at around 8%. The actual amount you need depends on your mortgage type, credit score, home price, and whether you qualify for down payment assistance programs.
This guide breaks down exactly how much you need for a down payment based on your specific situation. You will learn the minimums for every loan type, how your down payment affects monthly costs, and strategies to reduce what you pay upfront.
The 20% Down Payment Myth
The belief that you need 20% down to buy a home is one of the most persistent myths in real estate. This misconception prevents millions of qualified buyers from pursuing homeownership. While putting 20% down has advantages, it is far from required.
On a $400,000 home, 20% equals $80,000. At a savings rate of $500 per month, it would take over 13 years to accumulate that amount without interest. During those 13 years, home prices historically rise 3% to 5% annually, meaning the target keeps moving further away.
The reality is that multiple mortgage programs exist with far lower requirements. The conventional loan minimum is just 3%. FHA loans start at 3.5%. VA and USDA loans require nothing down. These programs were specifically designed to make homeownership accessible without massive upfront cash.
Myth vs Reality
A recent survey found that 44% of renters believe 20% down is required to buy a home. In reality, the average first-time buyer puts down just 8%, and many programs allow 0% to 3.5% down.
Down Payment Requirements by Loan Type
Each mortgage program has different down payment requirements. Your choice of loan type directly determines the minimum you need to save. Here is a comprehensive breakdown of every major option.
Conventional Loans
3% to 20%Conventional loans offer the widest range of down payment options. Standard conventional loans require 5% down. First-time buyer programs like Fannie Mae HomeReady and Freddie Mac Home Possible drop the minimum to 3%. Putting down less than 20% means paying PMI, which adds $50 to $200 monthly per $100,000 borrowed.
The conventional loan requirements include a minimum 620 credit score, though 3% down programs may require 680 or higher. Higher credit scores qualify for better rates and lower PMI costs.
FHA Loans
3.5% to 10%FHA loans are government-backed mortgages with lower credit requirements. With a 580+ credit score, the FHA down payment minimum is 3.5%. Scores between 500 and 579 require 10% down. FHA loans require both upfront and annual mortgage insurance premiums regardless of down payment size.
The FHA loan limits vary by county. In most areas, the 2025 limit is $524,225 for a single-family home. High-cost areas have limits up to $1,209,750.
VA Loans
0% DownVA loans offer zero down payment financing for eligible veterans, active-duty military, and surviving spouses. There is no PMI requirement, making VA loans one of the most powerful mortgage products available. The VA loan benefits include competitive interest rates and no maximum loan limit for full entitlement borrowers.
USDA Loans
0% DownUSDA loans provide zero down payment mortgages for homes in eligible rural and suburban areas. The program serves low to moderate-income buyers and includes a guarantee fee instead of PMI. Approximately 97% of the US land mass qualifies as USDA-eligible, including many areas near cities.
Down Payment Amounts by Home Price
This table shows exactly how much your down payment would be at different percentage levels for the most common home prices in the US today.
| 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 |
| $600,000 | $18,000 | $21,000 | $30,000 | $60,000 | $120,000 |
| $750,000 | $22,500 | $26,250 | $37,500 | $75,000 | $150,000 |
How Your Down Payment Affects Monthly Costs
Your down payment directly affects three parts of your monthly housing cost: the loan amount, your interest rate, and whether you pay mortgage insurance. A larger down payment reduces all three. Here is how different down payments compare on a $400,000 home at 6.5% interest over 30 years.
| Down Payment | Loan Amount | Monthly P&I | Est. PMI | Total Monthly |
|---|---|---|---|---|
| 3% ($12,000) | $388,000 | $2,452 | $194 | $2,646 |
| 5% ($20,000) | $380,000 | $2,402 | $171 | $2,573 |
| 10% ($40,000) | $360,000 | $2,275 | $126 | $2,401 |
| 20% ($80,000) | $320,000 | $2,023 | $0 | $2,023 |
Pro Tip
PMI is not permanent. Once you reach 20% equity through payments or appreciation, you can request PMI removal. Some homeowners reach this threshold in just a few years in rising markets.
Where Can Your Down Payment Come From?
Lenders accept down payment funds from multiple sources. Understanding approved sources helps you combine resources to reach your target amount faster. Here are the most common ways to fund your down payment.
Personal Savings
Your checking and savings accounts are the most straightforward source. Lenders typically require bank statements from the past 60 days to verify the funds have been in your account. Large deposits during that period may require explanation and documentation.
Gift Funds from Family
Most loan programs allow family members to gift down payment funds. FHA, VA, and USDA loans allow 100% of the down payment to come from gifts. Conventional loans may require you to contribute a portion from your own funds depending on the down payment percentage. Gift givers must provide a signed gift letter confirming the money is not a loan.
Down Payment Assistance Programs
Down payment assistance programs provide grants or loans to help cover your down payment. Over 2,600 programs exist across the country. Many state-specific DPA programs offer $5,000 to $25,000 in assistance. These programs are underutilized and can significantly reduce what you need to save.
Retirement Account Withdrawals
First-time home buyers can withdraw up to $10,000 from a traditional IRA without the 10% early withdrawal penalty. Roth IRA contributions can be withdrawn at any time penalty-free. Some 401(k) plans allow hardship withdrawals or loans for home purchases. However, consider the long-term impact on your retirement savings before tapping these funds.
Proceeds from Selling a Current Home
If you are selling your current home, the equity from that sale becomes your down payment. The cost of selling a house reduces your net proceeds. Work with your real estate agent to estimate your take-home amount after commissions, closing costs, and any outstanding mortgage balance.
Smart Down Payment Strategies
The optimal down payment depends on your financial situation, goals, and market conditions. Here are proven strategies to help you make the best decision.
Buy Now with Less Down vs Wait to Save More
In a rising market, buying sooner with a smaller down payment often builds more wealth than waiting years to save 20%. If home prices increase 4% annually, a $400,000 home becomes $416,000 in just one year. You would need to save an additional $3,200 just to maintain the same down payment percentage while losing a year of equity building.
Consider the Opportunity Cost
Money used for a larger down payment cannot be invested elsewhere. If your mortgage rate is 6.5% and you could earn 8% investing that money, a smaller down payment may create more long-term wealth. Run the numbers for your specific situation or consult a financial advisor.
Keep Emergency Reserves
Never put every dollar into your down payment. Homeownership brings unexpected expenses including repairs, maintenance, and property tax adjustments. Financial experts recommend keeping three to six months of housing expenses in reserve after closing. A first-time buyer checklist helps you plan for all costs.
Combine Multiple Resources
The most effective approach often combines personal savings, gift funds, and DPA programs. For example, save $5,000, receive a $5,000 family gift, and apply for a $10,000 state DPA grant. Together, that provides $20,000 toward your down payment and closing costs.
Special Programs for First-Time Buyers
First-time home buyers have access to exclusive programs that reduce or eliminate down payment requirements. Take advantage of these opportunities to get into your home sooner.
First-Time Buyer Grants
Grants for first-time buyers provide free money that never needs repayment. Federal, state, and local governments all offer grant programs ranging from $2,500 to $25,000.
Tax Credits
First-time buyer tax credits reduce your tax bill and can be used toward future mortgage payments or to rebuild savings after closing.
State HFA Programs
Every state housing finance agency offers programs combining below-market rates with down payment assistance. Many include state-specific grants and forgivable loans.
Employer Programs
Many employers offer housing assistance benefits. Teachers, healthcare workers, first responders, and military personnel often qualify for profession-specific down payment help.
Frequently Asked Questions
How much is a typical down payment on a house?
The typical down payment ranges from 3% to 20% of the purchase price. The national median is about 15% for all buyers and 8% for first-time buyers. On a $400,000 home, that is $12,000 to $80,000 depending on your loan type.
Can I buy a house with only 3% down?
Yes. Fannie Mae HomeReady and Freddie Mac Home Possible allow 3% down. FHA loans require 3.5%. VA and USDA loans offer 0% down for eligible borrowers. Down payment assistance programs can help cover these amounts.
Is it better to put 20% down on a house?
Putting 20% down eliminates PMI and lowers your payment. However, waiting years to save that much means missing market appreciation and equity building. Many advisors recommend buying sooner with less down if you can afford the payment.
What is the minimum down payment for an FHA loan?
The FHA minimum is 3.5% with a credit score of 580 or higher. Scores between 500 and 579 require 10% down. On a $300,000 home, the minimum FHA down payment is $10,500.
Does a larger down payment lower my interest rate?
Yes, larger down payments can result in lower rates. Lenders consider borrowers with more equity less risky. The difference is typically 0.125% to 0.25% for significant increases in down payment percentage.
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Find My AgentHow to Save for a Down Payment Faster
Learning how to save for a down payment requires discipline and strategy. The average down payment amount varies dramatically based on location, loan type, and buyer situation. Start by using a down payment calculator to determine how much do you need for your target home price. Most online calculators show your monthly mortgage payment at different down payment levels.
Many buyers wonder how much should you put down on a house. The answer depends on whether you want to put less down now or make a bigger down payment to reduce your monthly mortgage payment. A higher down payment lowers your monthly mortgage and eliminates the need for private mortgage insurance once you reach 20% home equity.
If you put less than 20% down, you will pay PMI on a conventional loan. This private mortgage insurance protects the lender if you default. The good news is PMI drops off once you build enough equity. For a first-time homebuyer, some programs require no down payment at all while others require a down payment for first-time buyers as low as 3%.
To put down on a house faster, consider automating monthly savings transfers, reducing discretionary spending, and exploring employer-matched savings programs. Every dollar you save toward a down payment reduces your loan amount and monthly payment. Some buyers need to put aside 10% to 15% of their monthly income to reach their savings goal within two to three years.
Making Your Down Payment Decision
The right down payment amount balances your available funds, monthly budget, and long-term financial goals. Do not let the 20% myth prevent you from exploring homeownership. If you put down less than 20% on a conventional home loan, you will pay PMI, but the trade-off is buying sooner. With minimum down payment requirements as low as 0% to 3%, buying a home is more accessible than most people realize.
The size of your down payment plays an important role in determining your monthly costs. A lower down payment means a larger loan balance, while making a down payment of 3.5% or more on an FHA loan opens the door to homeownership for millions. The payment for a house is expressed as a percentage of the purchase price. Whether you need to put 20% down or qualify for programs that require no down payment at all, understanding your options is the first step.
For a payment for first-time homebuyers, special programs often reduce the typical requirements. You do not need to put 20 percent down to buy your first home. Even a slightly higher down payment above the minimum can improve your terms and reduce costs long-term.
Both home buyers and sellers benefit from understanding different down payment amounts and how they affect the transaction. The median down payment for first-time buyers remains around 8%, proving you do not need a down payment of 20% to buy. Whether you choose percent down payment options of 3%, 5%, or 10%, each level has different implications for your required down payment and monthly costs. Payment loans, down payment loans, and a loan with a down payment from DPA all serve different needs. Some loans require a down payment while others do not. Interestingly, payment by age group varies: younger buyers typically put down less while older buyers contribute more from home sale proceeds.
Start by getting pre-approved for a mortgage to understand exactly what you qualify for. Explore down payment assistance programs that could reduce your upfront costs. Then work with a qualified real estate agent to find a home that fits your budget and lifestyle.
The sooner you take action, the sooner you start building equity and wealth through homeownership. Every month of rent paid is money that could be building your financial future. Check your pre-approval options today and take the first step toward owning your home.