What you need to put down on a $400,000 house
The down payment on a $400,000 house typically ranges from $12,000 to $120,000, depending on the loan type and your lender's requirements. A conventional loan usually requires 3% to 20% down. A Federal Housing Administration (FHA) loan requires 3.5% down. A U.S. Department of Veterans Affairs (VA) loan or U.S. Department of Agriculture (USDA) loan may require 0% down if you meet the program's conditions.
The amount you put down affects your monthly payment, your interest rate, and whether you pay mortgage insurance. A larger down payment lowers your monthly cost and may may have access to you for better rates. A smaller down payment means a higher monthly payment and almost always requires you to pay private mortgage insurance (PMI) on a conventional loan, or an upfront mortgage insurance premium on an FHA loan.
Your actual down payment depends on three things: the loan program you use, what your lender will accept, and what you can afford to pay upfront. This guide covers the real numbers for each path.
Key Takeaways
- Conventional loans on a $400,000 house require between $12,000 (3%) and $80,000 (20%) down, with rates and terms improving as you put more down.
- FHA loans require $14,000 (3.5%) down on a $400,000 house but add an upfront mortgage insurance premium of about $8,000 to $12,000 rolled into your loan.
- VA and USDA loans may allow 0% down if you meet military service or rural property requirements, but come with their own fees and restrictions.
- Putting down less than 20% on a conventional loan triggers PMI, which adds $100 to $300 per month to your payment depending on your down payment size and credit score.
- Your lender sets the minimum down payment they will accept, so the range available to you depends on which lenders you contact and what programs they offer.
Conventional loans: 3% to 20% down
A conventional loan is a mortgage not backed by a federal agency. On a $400,000 house, conventional lenders typically require a minimum of 3% down, which is $12,000. Some lenders will go lower—occasionally 2%—but 3% is the standard floor. The maximum most borrowers put down is 20%, or $80,000, because putting down more than that does not change your loan terms much and ties up cash you might need elsewhere.
The trade-off is clear: put down 3% and your monthly payment is higher, your interest rate may be higher, and you pay PMI. Put down 20% and your monthly payment drops, your rate improves, and you avoid PMI entirely. At 3% down on a $400,000 house, you borrow $388,000. At 20% down, you borrow $320,000—a difference of $68,000 in what you owe.
PMI on a conventional loan with 3% down typically runs $150 to $300 per month on a $400,000 purchase, depending on your credit score and the exact loan terms. You pay PMI until you reach 20% equity in the home, which can take 5 to 10 years. Once you hit that mark, you can request PMI removal, and your lender must remove it automatically when you reach 22% equity.
FHA loans: 3.5% down plus mortgage insurance
An FHA loan is backed by the Federal Housing Administration and is designed for borrowers with lower down payments or credit scores. On a $400,000 house, FHA requires 3.5% down, which is $14,000. This is slightly higher than the conventional 3% minimum, but FHA loans are often easier to obtain if your credit is below 620 or you have limited savings.
The catch is mortgage insurance. FHA charges an upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount, rolled into your mortgage. On a $386,000 FHA loan (after your $14,000 down payment), the UFMIP adds roughly $6,755 to what you owe. You also pay an annual mortgage insurance premium (MIP) of 0.55% to 0.80% per year, depending on your loan term and down payment size. This MIP stays on the loan for the life of the loan if you put down less than 10%, or for 11 years if you put down 10% or more.
The total cost of FHA mortgage insurance is higher than conventional PMI over time, but FHA loans are available to borrowers conventional lenders turn down. If your credit score is 580 to 619, FHA is often your only option for a down payment below 10%.
VA and USDA loans: 0% down if you may have access to
A VA loan is available to military members, veterans, and surviving spouses. A USDA loan is available for rural properties and borrowers who meet income limits. Both programs allow 0% down on a $400,000 house if you meet their conditions.
VA loans charge a funding fee instead of mortgage insurance. The funding fee is 2.3% of the loan amount for most borrowers using VA benefits for the first time, which on a $400,000 loan is $9,200. This fee is rolled into your loan. Subsequent VA loans have lower funding fees. VA loans do not require PMI or MIP.
USDA loans also charge a may provide fee (1% upfront, rolled into the loan) and an annual fee (0.35% per year). On a $400,000 USDA loan, the upfront may provide fee is $4,000. USDA loans are limited to properties in designated rural areas and borrowers with household income at or below 115% of the area median income. Your lender will confirm whether your property and income may have access to.
Both programs have trade-offs: you avoid a large down payment, but you pay fees that increase what you owe. For borrowers who may have access to, the 0% down option can free up cash for closing costs, repairs, or emergencies.
How down payment size affects your monthly payment
On a $400,000 house, the difference between a 3% and 20% down payment changes your monthly payment by roughly $300 to $400 before taxes and insurance. Here is how the math works:
| Down Payment % | Down Payment $ | Loan Amount | Est. Monthly Payment* |
|---|---|---|---|
| 3% | $12,000 | $388,000 | $2,050 + PMI |
| 5% | $20,000 | $380,000 | $2,010 + PMI |
| 10% | $40,000 | $360,000 | $1,900 + PMI |
| 15% | $60,000 | $340,000 | $1,800 + PMI |
| 20% | $80,000 | $320,000 | $1,690 |
*Estimates assume a 7% interest rate and 30-year term. Actual payments vary by your credit score, the exact rate your lender offers, and local property taxes and insurance. PMI typically adds $100 to $300 per month depending on your down payment and credit score.
The monthly payment difference between 3% and 20% down is significant over 30 years. Putting down an extra $68,000 upfront saves you roughly $300 to $400 per month, or $108,000 to $144,000 over the life of the loan. However, that $68,000 could also be invested or used for other purposes, so the right choice depends on your financial situation.
Closing costs and cash you need at closing
Your down payment is only part of the cash you need at closing. You also pay closing costs, which typically run 2% to 5% of the purchase price. On a $400,000 house, closing costs are usually $8,000 to $20,000. These cover the appraisal, title search, title insurance, loan origination fee, attorney fees, and other lender and third-party charges.
Some closing costs can be negotiated or rolled into your loan, but most lenders require you to pay them upfront. Plan on having your down payment plus 2% to 5% of the purchase price in cash available before closing. On a $400,000 house with 5% down, you need roughly $32,000 to $40,000 in total cash.
Some programs allow you to roll closing costs into your loan, which increases what you owe but reduces the cash you need at closing. Ask your lender which costs can be financed and which must be paid upfront.
How your credit score and debt affect down payment options
Your credit score and existing debt determine which down payment amounts your lender will accept. Borrowers with credit scores above 740 and low debt-to-income ratios can often put down 3% on a conventional loan and receive competitive rates. Borrowers with scores between 620 and 740 may face higher rates or be required to put down 5% to 10%. Borrowers below 620 are typically limited to FHA loans.
Your debt-to-income ratio (DTI) is your total monthly debt payments divided by your gross monthly income. Most lenders cap DTI at 43% to 50%, depending on the loan program. A larger down payment lowers your monthly mortgage payment, which lowers your DTI and makes you a stronger candidate for approval. If your DTI is already high, putting down more than the minimum can be the difference between approval and denial.
Before you commit to a down payment amount, get pre-approved by at least two lenders. Pre-approval tells you the exact rate and terms you may have access to for, which lets you compare the real cost of different down payment options.
Frequently Asked Questions
Can I use a gift for my down payment?
Yes, most lenders allow gift funds from family members for your down payment. You will need a signed gift letter stating the money is a gift, not a loan, and that the giver expects no repayment. The lender may also require proof that the gift funds have been in the giver's account for at least two months. Gifts cannot come from the seller or anyone with a financial interest in the sale.
What if I can only put down 2% or less?
Conventional loans rarely go below 3% down. If you can only put down 2% or less, your options are FHA (3.5% minimum), VA (0% if you may have access to), or USDA (0% if you may have access to). Some lenders offer portfolio loans or non-traditional programs with 2% down, but these are rare and carry higher rates. Ask your lender what programs they offer for borrowers with very small down payments.
Is it better to put down 10% or 20%?
Putting down 20% eliminates PMI entirely and usually gets you the best interest rate. Putting down 10% still requires PMI but costs less upfront. If you have the cash and no other pressing needs, 20% is typically better because you save on PMI over time. If you need to preserve cash for emergencies or investments, 10% down is reasonable if your credit score is strong.
Do I have to put down the same percentage as my friend or family member?
No. Your down payment depends on your credit score, debt, income, and which lender you use. Two people buying the same house can put down different amounts and receive different rates. Shop around with multiple lenders to see what down payment options and rates you actually may have access to for.
What happens if I put down more than 20%?
Putting down more than 20% does not significantly change your interest rate or monthly payment compared to 20% down. You eliminate PMI at 20%, so additional down payment mainly reduces the loan amount and your total interest paid over 30 years. Put down more than 20% only if you have excess cash and want to minimize total interest cost.