How Much Do I Need for a Down Payment on a House?
The short answer: You typically need between 3% and 20% of the home’s purchase price as a down payment - but some loan programs require zero down. For most first-time homebuyers, the minimum down payment is 3% to 3.5%, depending on the loan type. The “right” amount depends on your loan type, credit score, and financial goals.
What Is a Down Payment on a House?
A down payment is the upfront cash you pay toward a home’s purchase price. The remainder is covered by your mortgage loan. It’s expressed as a percentage - so a 3% down payment on a $300,000 home equals $9,000, and a 20% down payment on that same home would be $60,000.
The size of your down payment directly affects your loan amount, monthly payment, interest rate, and whether you’ll pay private mortgage insurance (PMI).
How Much Down Payment Do You Need to Buy a House?
You do not need 20% down to buy a house. That’s one of the most persistent myths in real estate. According to the National Association of Realtors, the median down payment for first-time homebuyers in 2025 was just 10%, and many buyers successfully purchased with even less.
Here’s what down payment minimums actually look like by loan type:
| Loan Type | Minimum Down Payment | Best For |
| Conventional Loan | 3% - 5% | Buyers with good credit |
| FHA Loan | 3.5% (credit score 580+) | First-time buyers, lower credit |
| VA Loan | 0% | Veterans and active military |
| USDA Loan | 0% | Rural/suburban buyers, income limits |
What Is the Minimum Down Payment for a Conventional Loan?
The minimum down payment for a conventional loan is 3% for fixed-rate mortgages, available to qualified first-time buyers through programs like Fannie Mae’s HomeReady or Freddie Mac’s Home Possible.
If you put less than 20% down on a conventional loan, you’ll be required to pay private mortgage insurance (PMI), which typically adds $30 - $70 per month for every $100,000 borrowed.
What Is the Minimum Down Payment for an FHA Loan?
FHA loans - backed by the Federal Housing Administration - are among the most popular options for first-time homebuyers because of their low down payment requirement.
- 3.5% down if your credit score is 580 or higher
- 10% down if your credit score is between 500 and 579
FHA loans require mortgage insurance premiums (MIP) for the life of the loan in most cases, which is an important cost to factor in.
Can You Buy a House With No Down Payment?
Yes - two government-backed loan programs offer zero down payment options:
VA Loans are available to eligible veterans, active-duty service members, and qualifying surviving spouses. There’s no PMI and no minimum down payment required, though a one-time funding fee typically applies.
USDA Loans offer zero-down financing for homes in eligible rural and suburban areas for buyers who meet income requirements. More areas qualify than most people expect.
Why Do People Recommend 20% Down?
The 20% threshold exists for one main reason: it eliminates the requirement for private mortgage insurance (PMI) on a conventional loan. Beyond that, a larger down payment also means:
- A smaller loan balance and lower monthly payments
- Less total interest paid over the life of the loan
- More equity in your home from day one
- A stronger offer in a competitive market
However, waiting to save 20% isn’t always the right move. If home prices are rising faster than you can save, the 20% target keeps moving further out of reach.
Is It Better to Put More or Less Down on a House?
There’s no one-size-fits-all answer. Here’s how to think about it:
Put more down if: you want to eliminate PMI, lower your monthly payment, and have enough savings left over after closing for an emergency fund and other expenses.
Put less down if: you’re financially ready for homeownership but haven’t had time to save a large sum, home prices are rising in your area, or you have other high-priority uses for your cash (like retirement savings or paying off high-interest debt).
PMI on a conventional loan can be canceled once you reach 20% equity in your home - it’s not permanent.
What Costs Beyond the Down Payment Should You Plan For?
One of the biggest financial surprises for first-time buyers is that the down payment isn’t the only upfront cost. Before closing day, also budget for:
- Closing costs: Typically 1 - 3% of the loan amount, covering lender fees, title insurance, appraisal, and more
- Home inspection:
- Moving expenses
- Immediate repairs or updates
- Cash reserves: Many lenders want to see savings remaining after you close
Are There Down Payment Assistance Programs?
Yes. Many states, counties, cities, and nonprofits offer down payment assistance (DPA) programs in the form of grants, forgivable loans, or deferred-payment loans. Eligibility often depends on income, home price, location, and first-time buyer status.
Ask your lender or a HUD-approved housing counselor about programs available in your area before assuming you need to fund your down payment entirely on your own.
Frequently Asked Questions About Down Payments
How much is a down payment on a $300,000 house? A 3% down payment on a $300,000 home is $9,000. A 10% down payment is $30,000. A 20% down payment is $60,000.
What credit score do I need for a 3% down payment? For a conventional loan with 3% down, most lenders require a minimum credit score of 620. For an FHA loan with 3.5% down, you need a score of at least 580.
Does a higher down payment get you a better interest rate? Generally, yes. A larger down payment reduces the lender’s risk, which can result in a slightly lower interest rate and better loan terms.
Can the down payment be a gift? Yes. Many loan programs allow the down payment to be gifted by a family member, though documentation is required to verify the funds are a gift and not a loan.
What is PMI and when do I have to pay it? Private mortgage insurance (PMI) is typically required on conventional loans when your down payment is less than 20%. It protects the lender if you default. You can request PMI cancellation once you reach 20% equity in your home.
How long does it take to save for a down payment? It varies widely based on income and local home prices. Setting a clear savings goal, automating contributions, and exploring down payment assistance programs can shorten the timeline significantly.
The Bottom Line: How Much Should You Put Down?
You need as little as 3% - or even 0% - to buy a home, depending on the loan program. The best down payment is the amount that gets you into a home you can comfortably afford while keeping you financially stable for what comes next.
If you’re a first-time buyer, don’t let the 20% myth keep you from exploring your options. Talk with a licensed mortgage lender or HUD-approved housing counselor to understand exactly what you qualify for.