What you need to put down on a $200,000 house

The down payment on a $200,000 house ranges from $0 to $60,000 depending on the loan type you choose. Most first-time buyers put down between 3% and 20% of the purchase price—that's $6,000 to $40,000. The lower your down payment, the higher your monthly mortgage payment and the more interest you pay over the life of the loan, because lenders charge you for the extra risk.

Your actual down payment depends on three things: which loan program you use, your credit score, and what you can afford to save. A conventional loan typically requires 3% to 20% down. An FHA loan (Federal Housing Administration) allows 3.5% down—$7,000 on a $200,000 house. A VA loan (if you are military or a veteran) often requires 0% down. A USDA loan (if you buy in a rural area and meet income limits) also requires 0% down.

Key Takeaways

  • On a $200,000 house, a 3% down payment is $6,000; a 5% down payment is $10,000; a 10% down payment is $20,000; and a 20% down payment is $40,000.
  • FHA loans let first-time buyers put down as little as 3.5% ($7,000), but you will pay mortgage insurance every month for the life of the loan.
  • Conventional loans with less than 20% down require private mortgage insurance (PMI), which adds $100 to $300 per month depending on your down payment and credit score.
  • VA and USDA loans may require no down payment at all if you meet the program requirements, but not all sellers accept these loans.
  • The money you save for a down payment does not have to come from your own bank account—gifts from family, grants, and employer programs can count.

How down payment size affects your monthly payment

A larger down payment lowers your monthly mortgage payment because you are borrowing less money. On a $200,000 house with a 30-year mortgage at 7% interest, the difference is substantial. With a 3% down payment ($6,000), you borrow $194,000 and your principal and interest payment is roughly $1,290 per month, plus mortgage insurance. With a 20% down payment ($40,000), you borrow $160,000 and your principal and interest payment drops to roughly $1,064 per month, with no mortgage insurance.

Mortgage insurance is the hidden cost of a small down payment. On an FHA loan with 3.5% down, you pay an upfront mortgage insurance premium (usually 1.75% of the loan amount, or about $3,395) rolled into your loan, plus a monthly insurance payment of $100 to $150. On a conventional loan with less than 20% down, private mortgage insurance (PMI) costs $100 to $300 per month depending on your down payment percentage and credit score. This insurance protects the lender, not you—it goes away once you have paid down the loan to 80% of the home's value, which takes years.

Down payment sources that lenders accept

Your down payment does not have to come from money you earned and saved yourself. Lenders accept down payment funds from several sources, and you will need to document where the money came from. A gift from a family member or close friend is allowed on most loans; the giver does not have to be repaid, and you will need a signed gift letter stating the amount and that no repayment is expected. Money from your own savings account, checking account, or investment account counts. A grant from a nonprofit or government program designed for first-time buyers counts and does not need to be repaid.

Some employers offer down payment assistance as part of their benefits package—ask your HR department. Retirement accounts like a 401(k) or IRA may allow you to withdraw funds penalty-free for a first-time home purchase, though this has tax and long-term consequences you should discuss with a tax professional. Proceeds from selling a car, jewelry, or other personal property count. What does not count: borrowed money (a personal loan, credit card cash advance, or loan from another person), money borrowed against your home or car, or funds that are not clearly documented as yours.

The trade-off between saving more and buying sooner

Putting down 20% ($40,000) eliminates mortgage insurance and gives you the lowest monthly payment, but it means waiting longer to buy while you save. Putting down 3% to 5% ($6,000 to $10,000) lets you buy sooner, but you pay mortgage insurance every month for years. The math depends on how long you plan to stay in the house and what interest rates are doing.

If you plan to stay in the house for 10 years or more, a larger down payment usually makes sense because you save more on mortgage insurance than you would earn by keeping that money invested. If you plan to move or refinance within 5 to 7 years, a smaller down payment may be smarter because you will not be in the house long enough to recoup the savings. Run the numbers with a mortgage calculator using your actual loan terms, or ask a loan officer to show you the total cost of the loan under different down payment scenarios.

First-time buyer programs that reduce your down payment

Many states, cities, and nonprofits offer down payment assistance programs specifically for first-time buyers. These programs vary widely by location, but common types include grants (money you do not repay), forgivable loans (loans that disappear if you stay in the house for a set period), and matched savings programs (the program adds money to what you save). Some programs are income-based, meaning you must earn below a certain threshold; others are geography-based, meaning you must buy in a specific neighborhood or county.

To find programs in your area, start with your state housing finance agency (search "[your state] housing finance agency") or contact your city or county housing department. The National Council of State Housing Agencies has a directory. Nonprofit organizations like NeighborWorks America and local community development corporations often run down payment assistance programs. Your mortgage lender may also know about programs available to their borrowers. Be aware that some programs have waiting lists or limited funding, so start your search early.

Closing costs separate from your down payment

Your down payment is not the only money you need at closing. Closing costs—the fees charged by the lender, title company, appraiser, and others—typically run 2% to 5% of the purchase price. On a $200,000 house, that is $4,000 to $10,000 on top of your down payment. These costs cover the appraisal, title search, title insurance, loan origination fees, attorney fees, and property taxes or homeowners insurance prorated to your closing date.

You can ask the seller to pay some or all of your closing costs as part of the negotiation, though this is more common in a buyer's market. You can also ask your lender about rolling closing costs into your loan, which means you borrow the money instead of paying it upfront—but this increases your total loan amount and the interest you pay. Before you commit to a down payment amount, make sure you have enough cash on hand for both the down payment and closing costs, or a plan to cover the closing costs separately.

Frequently Asked Questions

Can I get a mortgage with no money down as a first-time buyer?

Yes, if you may have access to for a VA loan (military or veteran) or a USDA loan (rural property, income limits apply). Conventional and FHA loans require at least 3% to 3.5% down. Some first-time buyer programs may cover your down payment entirely, but these are limited and often have income or location restrictions.

What credit score do I need to put down only 3%?

Most lenders require a credit score of at least 620 for a conventional loan with 3% down, though some require 640 or higher. FHA loans accept scores as low as 580 with 3.5% down. The lower your score, the higher your interest rate and mortgage insurance costs will be.

If I put down less than 20%, when does the mortgage insurance go away?

On a conventional loan, PMI drops off automatically once you have paid the loan down to 80% of the home's original value. On an FHA loan, mortgage insurance stays for the life of the loan if you put down less than 10%. You can request removal once you reach 80% equity, but the lender can refuse.

Can I borrow my down payment from family without it being a loan?

Yes, if the family member gives you the money as a gift with no expectation of repayment. You will need a signed gift letter stating the amount and that it is a gift, not a loan. The lender will ask for this letter before closing.

What happens if I do not have enough for both down payment and closing costs?

Ask your lender about rolling closing costs into the loan, negotiate with the seller to cover closing costs, or look for down payment assistance programs that may cover both. Some lenders also offer no-closing-cost mortgages, though these typically come with a higher interest rate.