How Much Down Payment Do You Need to Buy a House?
3% vs 10% vs 20% down payment explained. PMI costs, loan types, and how down payment size affects your monthly payment.
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Key Takeaways
- 120% down avoids PMI and gets the best rates — but is not required.
- 2FHA loans allow 3.5% down; conventional loans start at 3%.
- 3Lower down payment = higher monthly payment + PMI + less equity cushion.
- 4Keep 3–6 months expenses in savings after closing — do not drain everything.
The down payment myth: you need 20% to buy a home. Reality: most first-time buyers put down 6–7%. The right amount depends on your savings, loan type, and monthly budget.
Model payments at different down payment levels with our mortgage calculator.
Down Payment Options by Loan Type
Conventional: 3–20%. FHA: 3.5% minimum. VA/USDA: 0% for eligible buyers. Each has different mortgage insurance rules.
A $400,000 home at 3% down ($12,000) vs 20% ($80,000) changes your payment by $400+/month.
The PMI Tradeoff
Under 20% down, you pay Private Mortgage Insurance — typically $100–$300/month until you reach 20% equity.
Read what is PMI to calculate the true cost of a low down payment.
How Much Should YOU Put Down?
Put down the minimum that keeps your housing payment under 28% of income AND leaves an emergency fund intact.
Factor closing costs — another 2–5% due at signing.
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