What you need to put down on a $300,000 house
The down payment on a $300,000 house typically ranges from $9,000 to $90,000, depending on the loan type and your lender's requirements. A conventional loan usually requires 3% to 20% down. An FHA loan requires 3.5% down. A VA loan (if you may have access to) requires 0% down. The exact amount you'll need depends on which loan program you use, your credit score, and what your lender will accept.
The down payment is the cash you hand over at closing. The rest of the purchase price is borrowed through a mortgage. The larger your down payment, the smaller your monthly payment and the less interest you pay over the life of the loan. But a larger down payment also means more cash out of pocket upfront.
Key Takeaways
- A 3% down payment on a $300,000 house is $9,000; a 20% down payment is $60,000.
- Conventional loans require a minimum down payment, but FHA loans let you put down as little as 3.5% ($10,500) if you have a credit score of 580 or higher.
- Putting down less than 20% on a conventional loan means you'll pay private mortgage insurance (PMI) until you reach 20% equity in the home.
- VA loans and USDA loans may allow 0% down if you meet the program's military service or rural property requirements.
- Your down payment amount affects your interest rate, monthly payment, and total loan cost, so comparing scenarios with your lender is worth the time.
Down payment percentages and dollar amounts
On a $300,000 purchase price, here's what different down payment percentages mean in actual dollars:
| Down Payment % | Dollar Amount | Loan Amount |
|---|---|---|
| 3% | $9,000 | $291,000 |
| 5% | $15,000 | $285,000 |
| 10% | $30,000 | $270,000 |
| 15% | $45,000 | $255,000 |
| 20% | $60,000 | $240,000 |
These numbers don't include closing costs, which typically run 2% to 5% of the purchase price—another $6,000 to $15,000 on a $300,000 house. You may be able to roll closing costs into your loan or negotiate with the seller to cover them, but you should plan for the possibility that you'll pay them out of pocket.
How loan type affects your down payment requirement
Conventional loans are issued by banks and mortgage companies, not backed by a government agency. Most conventional lenders require a minimum of 3% down, though some require 5% or more. If you put down less than 20%, you'll pay private mortgage insurance (PMI)—an extra monthly fee that protects the lender if you default. PMI typically costs 0.5% to 1.5% of your loan amount per year, divided into monthly payments. On a $291,000 loan (3% down), PMI might add $120 to $360 per month.
FHA loans are backed by the Federal Housing Administration and are designed for borrowers with lower credit scores or smaller down payments. FHA requires a minimum 3.5% down payment ($10,500 on a $300,000 house) if your credit score is 580 or higher. FHA also requires mortgage insurance, but it's built into the loan and doesn't disappear once you reach 20% equity—you pay it for the life of the loan if you put down less than 10%.
VA loans are available to military members, veterans, and some surviving spouses. VA loans require 0% down—you can borrow the full $300,000 with no down payment. You'll pay a VA funding fee (typically 1.4% to 3.6% of the loan amount) instead of PMI, and this fee can be rolled into the loan.
USDA loans are for rural properties and are available to borrowers with low to moderate income. USDA loans also allow 0% down. You'll pay a may provide fee instead of a down payment, which is added to your loan balance.
Private mortgage insurance and when it ends
If you put down less than 20% on a conventional loan, your lender will require PMI. This insurance protects the lender, not you—it covers their loss if you stop paying. PMI is added to your monthly mortgage payment and typically costs between $120 and $360 per month on a $300,000 house, depending on your down payment, credit score, and loan term.
PMI ends automatically once you reach 20% equity in the home through regular payments. On a $291,000 loan (3% down), this takes roughly 10 to 12 years, depending on your interest rate and loan term. You can also request PMI removal once you've paid down the principal to 80% of the original purchase price, though your lender may require a home appraisal to confirm the home's current value.
FHA mortgage insurance works differently. If you put down 10% or more on an FHA loan, the mortgage insurance premium (MIP) ends after 11 years. If you put down less than 10%, you pay MIP for the life of the loan. This is a significant cost difference and worth calculating before you choose FHA over conventional.
Closing costs and cash needed at closing
Your down payment is only part of the cash you need at closing. Closing costs typically include appraisal fees, title insurance, property taxes, homeowners insurance, origination fees, and attorney fees. These costs vary by location and lender but usually total 2% to 5% of the purchase price.
On a $300,000 house, closing costs might range from $6,000 to $15,000. Some lenders allow you to roll closing costs into your loan, which means you don't pay them upfront but you pay interest on them over 30 years. Others require you to pay them at closing. Some sellers will negotiate to cover part or all of your closing costs, especially in a buyer's market.
Before you commit to a down payment amount, ask your lender for a Loan Estimate, which breaks down all closing costs and shows you the total cash needed at closing. This document is required by law and must be provided within three business days of your application.
How down payment size affects your interest rate and monthly payment
A larger down payment typically means a lower interest rate. Lenders view borrowers who put down 20% or more as lower risk, so they offer better rates. The difference might be 0.25% to 0.5% lower on your interest rate, which translates to $50 to $150 less per month on a $300,000 loan.
Here's a rough example of how down payment affects your monthly payment (principal and interest only, not including taxes, insurance, or PMI) on a $300,000 house at a 7% interest rate over 30 years:
| Down Payment | Loan Amount | Monthly Payment (approx.) |
|---|---|---|
| 3% ($9,000) | $291,000 | $1,938 |
| 10% ($30,000) | $270,000 | $1,797 |
| 20% ($60,000) | $240,000 | $1,597 |
Add PMI to the 3% and 10% scenarios, and your actual monthly payment is higher. The 20% down scenario avoids PMI entirely, making it the lowest monthly payment. However, if you have the cash to put down 20% but could invest it elsewhere at a higher return, a smaller down payment might make financial sense—you'd need to run the numbers with your specific situation.
Down payment assistance and gift funds
If you don't have the full down payment saved, several options exist. Some employers offer down payment assistance programs. Some nonprofits and state housing agencies offer grants or forgivable loans for first-time homebuyers. The National Housing Trust Fund and Community Development Block Grants are two federal programs that fund these local initiatives, though availability varies by state and county.
You can also use a gift from a family member to cover part or all of your down payment. Most lenders allow gift funds as long as the person giving the money signs a gift letter stating it's a gift, not a loan you'll repay. The gift letter must be provided before closing. Some lenders limit how much of your down payment can come from gifts—typically you must contribute at least 3% to 5% of your own funds—but this varies by loan program.
If you're considering a down payment assistance program, contact your local housing authority or search the HUD website for programs in your area. Many programs have income limits and are designed for first-time homebuyers, so may be able to access varies.
Frequently Asked Questions
Can I put down less than 3% on a conventional loan?
Most conventional lenders require a minimum 3% down. Some lenders offer 2% down programs, but these are less common and typically require a higher credit score (usually 680 or above) and a larger PMI payment. Ask your lender whether they offer programs below 3%.
What's the difference between PMI and FHA mortgage insurance?
PMI on a conventional loan ends once you reach 20% equity. FHA mortgage insurance (MIP) is permanent if you put down less than 10%, meaning you pay it for the entire 30-year loan. If you put down 10% or more on an FHA loan, MIP ends after 11 years. FHA insurance is typically cheaper per month but lasts longer, so compare the total cost over your expected loan term.
Should I put down 20% to avoid PMI?
Not necessarily. If you have the cash but could earn a higher return investing it, a smaller down payment with PMI might cost less overall. Use a mortgage calculator to compare scenarios: a 3% down payment with PMI versus a 20% down payment, factoring in the interest rate difference and PMI cost. The answer depends on your interest rate, credit score, and investment options.
Can I use a gift from a family member for my down payment?
Yes. The person giving the gift must provide a signed gift letter stating the money is a gift, not a loan. Your lender will require this letter before closing. Most lenders allow your entire down payment to come from gifts, though some require you to contribute at least 3% to 5% of your own funds.
What if I don't have enough saved for the down payment?
Explore FHA loans (3.5% down), VA or USDA loans (0% down if you may have access to), down payment assistance programs through your state or local housing authority, or gifts from family members. You can also negotiate with the seller to cover closing costs, which frees up more of your cash for the down payment.