How Much Down Payment Do You Need To Buy a House?
3% vs 10% vs 20% down explained: PMI costs, loan-type minimums, and how the down payment changes your monthly payment and cash reserves.
You do not need 20% — conventional loans start near 3% and FHA at 3.5% — but 20% avoids PMI and gets the best pricing.
What you'll walk away with
Skim these first — then dig into the details below.
- 120% down avoids PMI and earns the best rates, but it is not required.
- 2FHA allows 3.5% down; many conventional programs start at 3%.
- 3A smaller down payment means a higher payment, PMI, and less equity cushion.
- 4Keep 3–6 months of expenses in savings after closing — do not drain everything.
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The 20% down payment is a guideline that became a myth. Most first-time buyers put down far less and still buy successfully.
The real question is not the minimum — it is how much you can put down while keeping the payment affordable and your savings intact.
Minimums by loan type
Each program has its own floor and its own mortgage insurance rules.
- Conventional: as low as 3% for qualified first-time buyers, PMI until 20% equity.
- FHA: 3.5% down with a 580+ score, but mortgage insurance often lasts the life of the loan.
- VA: 0% down for eligible veterans and service members, no monthly mortgage insurance.
- USDA: 0% down in eligible rural areas with income limits.
- Jumbo: typically 10–20% minimum with stricter reserve requirements.
What the down payment actually changes
Four things move at once when you change the down payment, and only one is the monthly number.
- Loan size, which drives principal and interest.
- PMI, which disappears at 20% on conventional loans.
- Your interest rate, since lenders price lower loan-to-value more favorably.
- Your equity cushion, which matters if home values dip and you need to sell.
How to choose your number
Work backward from the payment and your remaining cash, not from a rule.
- 1
Set the maximum total housing payment you can carry — aim for under 28% of gross income.
- 2
Find the down payment that gets you there, including taxes, insurance, and PMI.
- 3
Subtract closing costs of roughly 2–5% of the price.
- 4
Confirm 3–6 months of expenses remain in savings after closing.
- 5
If the numbers only work by emptying your emergency fund, wait or lower the price target.
When to buy sooner vs save longer
Waiting to reach 20% is not automatically the better financial decision.
- Buy sooner if rents are climbing fast and the payment fits comfortably with PMI.
- Save longer if PMI plus the higher payment stretches you past 30% of income.
- Remember PMI is removable — see what is PMI.
- Check state and local first-time buyer down payment assistance programs, which are widely underused.
Disclaimer: This page includes AI-assisted educational content reviewed for general accuracy. It is not personalized financial, tax, or legal advice. Verify numbers with a qualified professional and our editorial standards.
Continue reading
Related guides that deepen the same decision.
What Is PMI? Private Mortgage Insurance Explained
PMI is insurance that protects your lender when you put less than 20% down, typically costing 0.5–1.5% of the loan per year until you reach 20% equity.
ReadReal EstateHow Much House Can I Afford? Rules, Ratios & Calculator
Keep total housing costs under about 28% of gross monthly income and all debt payments under 36%, then buy below your pre-approval ceiling so repairs and rate changes do not break your budget.
ReadReal EstateClosing Costs for Homebuyers: What To Expect and How To Save
Budget 2–5% of the purchase price for closing costs on top of your down payment, and expect the largest line items to be loan origination, title insurance, and prepaid taxes and insurance.
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