The minimum down payment depends on the loan type, not a single rule

There is no single minimum down payment for every home purchase. The amount you need to put down depends on which loan program you use: conventional mortgages, FHA loans, VA loans, and USDA loans each have different requirements. A conventional loan from a bank or mortgage lender might require 3 to 20 percent down. An FHA loan can go as low as 3.5 percent. A VA loan (for military members and veterans) often requires zero down. USDA loans in rural areas can also require zero down for borrowers who meet income limits.

The lender you choose also matters. Some conventional lenders will accept 3 percent down; others require 5 or 10 percent. The interest rate you receive, the monthly payment amount, and whether you pay mortgage insurance all shift based on how much you put down and which program you choose.

Key Takeaways

  • FHA loans allow down payments as low as 3.5 percent, while conventional loans typically start at 3 percent, though some lenders require more.
  • VA loans and USDA loans can require zero down payment if you meet the program's other requirements.
  • Putting down less than 20 percent on a conventional loan means you will pay mortgage insurance (PMI) on top of your monthly payment.
  • Your credit score, debt-to-income ratio, and savings history affect which programs and down payment amounts a lender will offer you.
  • The lowest down payment is not always the best choice—a larger down payment lowers your monthly cost and eliminates mortgage insurance.

Conventional loans: 3 to 20 percent down

A conventional mortgage is a loan that is not backed by a government agency. Banks, credit unions, and mortgage companies offer them. The minimum down payment varies by lender, but most will accept 3 percent. Some require 5 percent. A few will go lower for borrowers with strong credit and stable income, but 3 percent is the floor most lenders will touch.

If you put down less than 20 percent on a conventional loan, you will pay private mortgage insurance (PMI). This is an extra monthly fee added to your mortgage payment. PMI protects the lender if you stop paying. The cost depends on how much you put down, your credit score, and the loan amount. On a $300,000 home with 5 percent down, PMI might run $150 to $250 per month. You can remove PMI once you have paid the loan down to 80 percent of the home's value, but that takes years.

Putting down 20 percent eliminates PMI entirely. On that same $300,000 home, 20 percent is $60,000. That is a large sum, but it saves you thousands in insurance over the life of the loan.

FHA loans: 3.5 percent down

An FHA loan is backed by the Federal Housing Administration. These loans are designed for first-time buyers and people with lower credit scores or smaller down payments. The minimum down payment is 3.5 percent of the purchase price.

FHA loans require mortgage insurance, but it works differently than PMI on a conventional loan. You pay an upfront insurance premium (usually 1.75 percent of the loan amount, rolled into your mortgage) and an annual premium added to your monthly payment. The annual premium stays on the loan for the life of the loan if you put down less than 10 percent. If you put down 10 percent or more, you can remove the annual premium after 11 years.

FHA loans are easier to get than conventional loans if your credit is below 620 or if you have had a recent bankruptcy or foreclosure. The trade-off is that you will pay mortgage insurance for a longer period.

VA loans: zero down for may be able to access veterans

A VA loan is available to active-duty military members, veterans, and surviving spouses. The Department of Veterans Affairs guarantees the loan, which means the lender takes less risk. Because of that may provide, most VA lenders require zero down payment.

VA loans do not require mortgage insurance. Instead, you pay a one-time VA funding fee, which is a percentage of the loan amount. The fee ranges from 1.4 to 3.6 percent depending on whether this is your first VA loan and how much you put down. You can roll this fee into your mortgage or pay it upfront. If you are receiving disability compensation from the VA, you may be exempt from the funding fee.

To use a VA loan, you need a Certificate of may be able to access from the VA. You can request one through the VA website or through your lender, and the process takes a few days to a few weeks.

USDA loans: zero down in rural areas

A USDA loan is backed by the U.S. Department of Agriculture and is designed for rural homebuyers. The minimum down payment is zero. You must buy a home in a USDA-may be able to access rural area, and your household income cannot exceed the limit for your county (limits vary widely by location).

USDA loans require an upfront may provide fee (1 percent of the loan amount) and an annual fee added to your monthly payment. Like VA loans, you can roll the upfront fee into your mortgage. USDA loans do not require a minimum credit score, though most lenders will want a score of at least 580.

You can check whether a property is in a USDA-may be able to access area using the USDA's online map. If the address qualifies and your income is within the limit, a USDA loan can be a path to homeownership with no down payment.

How down payment size affects your monthly payment and total cost

The amount you put down directly changes how much you borrow and how much you pay over time. On a $300,000 home at 7 percent interest over 30 years, putting down 3 percent ($9,000) means borrowing $291,000. Your principal and interest payment is about $1,935 per month, plus PMI of roughly $175 per month, for a total of about $2,110.

Putting down 20 percent ($60,000) means borrowing $240,000. Your principal and interest payment drops to about $1,596 per month, with no PMI. That is $514 less per month—or $185,000 less over 30 years. The larger down payment also means you own more of the home from day one and build equity faster.

A smaller down payment lets you buy sooner and keeps cash in your savings account for emergencies. A larger down payment lowers your monthly cost and total interest paid. The right choice depends on your financial situation, not on what is technically possible.

What lenders look at beyond down payment size

Your down payment is only one part of a lender's decision. They also examine your credit score, debt-to-income ratio, employment history, and savings. A credit score below 620 may disqualify you from conventional and USDA loans, but FHA and VA loans are more flexible. A debt-to-income ratio above 50 percent (your monthly debt payments divided by your gross monthly income) can limit how much you can borrow, regardless of down payment.

Lenders also want to see that you have saved money for a down payment yourself. If you are borrowing the down payment from a family member, most lenders require a signed letter stating it is a gift, not a loan you have to repay. Some lenders require proof that you have had the gift funds in your account for at least two months.

Your employment history matters too. Lenders prefer to see at least two years of stable income. If you recently changed jobs, started a business, or had a gap in employment, you may face higher interest rates or stricter down payment requirements.

Frequently Asked Questions

Can I borrow money for my down payment?

Most lenders will not allow you to borrow the down payment from a bank, credit card, or personal loan. However, you can receive it as a gift from a family member. The lender will require a signed gift letter stating the money does not have to be repaid. Some programs also allow down payment assistance from nonprofits or government programs, though these vary by location and income.

What happens if I put down less than 3 percent?

Conventional lenders rarely go below 3 percent. If you cannot save 3 percent, an FHA loan at 3.5 percent, a VA loan at zero percent, or a USDA loan at zero percent may be your options. Some nonprofits and state housing programs offer down payment assistance that can bridge the gap, but these are not available everywhere.

Is it better to put down more money or invest it instead?

That depends on your interest rate and investment returns. If your mortgage rate is 7 percent and you expect investment returns of 8 to 10 percent, investing the extra money might come out ahead over time. If your rate is 7 percent and you are risk-averse, paying down the mortgage eliminates a may provide 7 percent "return" by reducing what you owe. There is no single right answer—it is a personal choice based on your comfort with debt and risk.

Do I have to put down 20 percent to avoid mortgage insurance?

On a conventional loan, yes—20 percent eliminates PMI. On an FHA loan, putting down 10 percent or more lets you remove the annual mortgage insurance after 11 years, but you still pay the upfront premium. VA and USDA loans do not have mortgage insurance at all, only a one-time funding or may provide fee.

Can I increase my down payment after I start the loan process?

Yes. If you save more money or receive a bonus before closing, you can increase your down payment. Tell your lender as soon as possible so they can recalculate your loan amount, monthly payment, and whether you need mortgage insurance. This change usually does not delay closing.