The typical down payment is 10 to 20 percent of the home's purchase price, but you can put down as little as 3 percent with certain loan types.
If you are buying a $300,000 house, a 20 percent down payment is $60,000. A 10 percent down payment is $30,000. A 3 percent down payment is $9,000. The actual amount you put down depends on the loan program you use, how much cash you have saved, and what your lender requires.
Most first-time buyers put down between 6 and 10 percent, not the 20 percent that older advice suggests. That 20 percent figure comes from an older era when it was harder to get a mortgage without it. Today, loans exist that let you put down far less—but putting down less means paying more over time in interest and mortgage insurance.
Key Takeaways
- A 20 percent down payment avoids mortgage insurance, but most buyers today put down 10 percent or less.
- FHA loans let you put down 3.5 percent; conventional loans with private mortgage insurance can go as low as 3 percent.
- The lower your down payment, the higher your monthly payment and the more interest you pay over the life of the loan.
- Your lender will tell you the minimum down payment for your specific loan type and credit situation.
How down payment size changes your monthly cost
A smaller down payment means you borrow more money, which raises your monthly mortgage payment. On a $300,000 house, putting down $60,000 (20 percent) means borrowing $240,000. Putting down $9,000 (3 percent) means borrowing $291,000. The difference in monthly payment can be $300 to $400 or more, depending on interest rates.
If you put down less than 20 percent on a conventional loan, you also pay private mortgage insurance (PMI)—an extra monthly fee that protects the lender if you stop paying. PMI typically costs 0.5 to 1.5 percent of the loan amount per year, added to your monthly bill. You can remove PMI once you have paid down the loan enough that your down payment plus equity equals 20 percent of the home's value, but that takes years.
FHA loans use mortgage insurance premiums (MIP) instead of PMI. An upfront MIP is due at closing (usually rolled into the loan), and an annual MIP is added to your monthly payment. Unlike PMI, FHA mortgage insurance does not go away automatically—you pay it for the life of the loan if you put down less than 10 percent.
Minimum down payments by loan type
| Loan Type | Minimum Down Payment | Mortgage Insurance Required |
|---|---|---|
| Conventional (standard) | 3 to 5 percent | Yes, if under 20 percent |
| FHA | 3.5 percent | Yes, always |
| VA (if may be able to access) | 0 percent | No |
| USDA (rural areas) | 0 percent | No |
Conventional loans are the most common. Most lenders require 3 to 5 percent down, though some require more depending on your credit score and debt-to-income ratio. If you put down less than 20 percent, you pay PMI until you reach 20 percent equity.
FHA loans are designed for buyers with lower credit scores or smaller savings. The 3.5 percent minimum is lower than most conventional loans, but the mortgage insurance is permanent—you cannot remove it even after you build equity. FHA loans also have stricter rules about the home's condition and your debt levels.
VA loans (for military members, veterans, and surviving spouses) and USDA loans (for rural home buyers who meet income limits) both allow 0 percent down. These programs do not require mortgage insurance, which makes them the cheapest option if you are may be able to access.
What lenders actually look at when setting your down payment
Your lender does not just pick a down payment percentage out of thin air. They look at your credit score, your debt-to-income ratio (how much you already owe compared to what you earn), and the home's value compared to the loan amount.
If your credit score is 620 to 639, most lenders will require a higher down payment—often 10 percent or more—even if the loan program technically allows 3 percent. If your score is 740 or higher, you may may have access to for 3 percent down on a conventional loan. If your debt-to-income ratio is already high (you have car loans, student loans, credit card debt), lenders may require more down to reduce their risk.
The home's appraisal also matters. If the house appraises for less than the purchase price, your down payment percentage goes up automatically. If you agreed to pay $300,000 but the home appraises at $280,000, you now need to put down more cash to keep the loan amount reasonable, or renegotiate the price.
Why putting down more than 20 percent rarely makes sense
Once you reach 20 percent down, you eliminate PMI or MIP, which saves money every month. But putting down 30, 40, or 50 percent usually is not the best use of your cash. That money could stay in savings for emergencies, go into retirement accounts, or be invested in the stock market—all of which may earn you more over time than the interest you save on the mortgage.
The exception is if you have no other debts, a full emergency fund, and retirement savings already in place. Then putting down more can make sense psychologically—you own more of the home outright and have a smaller monthly payment. But mathematically, it is usually not the most efficient choice.
How to figure out what you can actually afford to put down
Start by adding up how much cash you have available. Subtract your emergency fund (three to six months of living expenses), any money you need for closing costs and inspections, and any other debts you want to pay off first. What is left is what you could put toward a down payment.
Then talk to a lender. Tell them your income, debts, credit score, and how much you have saved. They will tell you the minimum down payment they require for your situation and what your monthly payment would be at different down payment levels. Use that information to decide what feels right for your budget.
Remember that your down payment is not the only cost. You also pay closing costs (typically 2 to 5 percent of the purchase price), property taxes, homeowners insurance, and possibly HOA fees. Make sure you have cash left over after the down payment to cover these.
Frequently Asked Questions
Can I borrow my down payment from someone else?
Most lenders allow a gift from a family member, but not a loan. If you borrow the money, the lender will count it as debt on your application, which lowers how much you can borrow. A gift must come with a signed letter from the giver stating it does not need to be repaid.
What happens if I put down less than 3 percent?
Conventional loans do not go below 3 percent down. FHA goes to 3.5 percent. If you have less saved, look into VA or USDA loans if you are may be able to access, or wait and save more. Some first-time buyer programs through state housing agencies offer down payment help, but these vary by location.
Does a bigger down payment help me get approved?
Yes. A larger down payment lowers the lender's risk, so it can help you get approved if your credit or income is borderline. It can also help you negotiate a better interest rate. But it is not required—many buyers are approved with 3 to 5 percent down.
Can I remove PMI early?
Yes, once your loan balance drops to 80 percent of the home's original purchase price, you can request PMI removal. Some lenders remove it automatically at that point; others require you to ask. You cannot remove it if the home's value has dropped below the purchase price.
Is 10 percent down considered a good down payment?
Ten percent is solid and puts you in the range most first-time buyers use. You will pay PMI, but the monthly cost is manageable for most budgets. Twenty percent avoids PMI entirely, but 10 percent is a reasonable middle ground if saving more would strain your finances.