What you actually need to put down on a $300,000 house
The short answer: between $9,000 and $90,000, depending on the loan type you choose and what the lender requires. There is no single "first-time buyer" down payment. The percentage you put down affects your monthly payment, how much you borrow, and whether you pay mortgage insurance on top of your loan.
Most first-time buyers put down 3% to 20% of the home price. On a $300,000 house, that means $9,000 to $60,000. Some programs go lower—FHA loans can go as low as 3.5%, which is $10,500. VA loans (if you served in the military) and USDA loans (if you buy in a rural area) can go to 0% down. The trade-off is that lower down payments mean higher monthly payments and, usually, mortgage insurance added to your loan.
Your choice depends on three things: how much cash you have saved, what monthly payment you can afford, and which loan programs you actually may have access to for. A lender will tell you the real options available to you once they see your income, credit score, and debt.
Key Takeaways
- On a $300,000 home, a 3% down payment is $9,000; 5% is $15,000; 10% is $30,000; and 20% is $60,000.
- FHA loans allow 3.5% down ($10,500), but add mortgage insurance that stays on your loan for the life of the loan if you put down less than 10%.
- Conventional loans with less than 20% down require mortgage insurance, but that insurance can be removed once you reach 20% equity in the home.
- VA and USDA loans may allow 0% down if you meet the program requirements, but not all homes or sellers accept these loans.
- Your actual monthly payment depends on down payment size, interest rate, loan length, and whether mortgage insurance is included.
How down payment size changes your monthly payment
The larger your down payment, the less you borrow, and the lower your monthly payment. But the relationship is not straightforward because mortgage insurance, interest rates, and loan type all shift the math.
On a $300,000 home with a 30-year loan at 7% interest (a realistic rate as of early 2024, though rates change), here is what the principal and interest alone would be:
| Down Payment | Amount Borrowed | Principal + Interest (30-year, 7%) |
|---|---|---|
| 3% ($9,000) | $291,000 | $1,938/month |
| 5% ($15,000) | $285,000 | $1,897/month |
| 10% ($30,000) | $270,000 | $1,797/month |
| 20% ($60,000) | $240,000 | $1,596/month |
But this does not include property taxes, homeowners insurance, HOA fees (if any), or mortgage insurance. Mortgage insurance is the real cost that changes the picture. With a conventional loan and less than 20% down, you pay mortgage insurance monthly. With an FHA loan, you pay mortgage insurance upfront (rolled into the loan) and then monthly. That insurance can add $200 to $500 per month depending on your down payment and loan size.
So a 3% down conventional loan might have a total monthly payment (with insurance) of around $2,200 to $2,400, while a 20% down loan might be around $1,800 to $2,000—before taxes and insurance on the home itself.
Conventional loans: 3% to 20% down
A conventional loan is a mortgage that is not backed by the federal government. Lenders set the rules, and most require a minimum down payment of 3% to 5%. You can put down more if you have the cash.
If you put down less than 20%, you pay private mortgage insurance (PMI). This is insurance that protects the lender if you stop paying. It does not protect you. PMI typically costs 0.5% to 1.5% of your loan amount per year, paid monthly. On a $291,000 loan (3% down on $300,000), PMI might be $120 to $360 per month.
The advantage: PMI can be removed once you reach 20% equity in the home. If your home value stays at $300,000 and you pay down the loan to $240,000, you can request PMI removal. This usually takes 5 to 10 years, depending on your down payment and how fast you pay.
The disadvantage: you are paying for insurance that does not benefit you, and it adds to your monthly cost. You also need a credit score of around 620 or higher to may have access to, and your debt-to-income ratio (all your monthly debt payments divided by your gross monthly income) usually cannot exceed 43% to 50%.
FHA loans: 3.5% down with mortgage insurance for life
An FHA loan is backed by the Federal Housing Administration. It allows a down payment as low as 3.5%, which on a $300,000 home is $10,500. FHA loans are popular with first-time buyers because the credit score requirement is lower (usually 580 or higher, sometimes as low as 500 with a larger down payment).
The catch: FHA loans require mortgage insurance premium (MIP) in two forms. You pay an upfront MIP of 1.75% of the loan amount, rolled into your loan. Then you pay annual MIP monthly for the life of the loan if your down payment is less than 10%. If you put down 10% or more, the annual MIP drops off after 11 years.
On a $291,500 loan (3.5% down), the upfront MIP is about $5,100, added to what you borrow. Then you pay roughly $200 to $250 per month in annual MIP. That MIP never goes away unless you refinance into a conventional loan later.
FHA loans also have limits on how much you can borrow in your area. In most places, the limit is around $766,550 as of 2024, but it varies by county. A $300,000 home is well under that limit in most areas.
VA and USDA loans: 0% down if you may have access to
If you served in the military, a VA loan allows you to buy with 0% down and no mortgage insurance. You pay a one-time VA funding fee (usually 2.3% of the loan amount for first-time users, rolled into the loan), but no ongoing insurance. VA loans also have no prepayment penalty, so you can pay off the loan early without extra fees.
The limitation: not all sellers accept VA loans, and the home must meet VA property standards. Some older or rural homes do not may have access to. You also need a Certificate of may be able to access from the VA, which you can request online through VA.gov.
If you buy in a rural area and have a low to moderate income, a USDA loan also allows 0% down and no mortgage insurance. USDA loans are for homes in designated rural areas (not suburbs of large cities). Like VA loans, they have a one-time may provide fee (around 2% of the loan amount) rolled into the loan.
Both VA and USDA loans have income or property location limits. Check with a lender to see if you and the home may have access to.
How to decide what down payment makes sense for you
The choice between 3%, 5%, 10%, or 20% down comes down to three questions:
Do you have the cash without draining your emergency fund? A down payment is not the only cost. You also need cash for closing costs (typically 2% to 5% of the home price, so $6,000 to $15,000 on a $300,000 home), inspections, appraisals, and moving. If putting down 20% means you have no savings left, a smaller down payment with mortgage insurance might be smarter. You can always pay extra toward the principal later.
What monthly payment can you actually afford? Use a mortgage calculator to see the difference between 3% and 20% down at your expected interest rate. If the difference is $300 per month and that stretches your budget, 3% down might be the right choice. If you can comfortably afford the higher payment, 20% down saves you tens of thousands in interest over 30 years.
Which loan programs do you may have access to for? If you are a veteran, a VA loan at 0% down is almost always better than a conventional loan. If you have a lower credit score or higher debt, an FHA loan might be your only option. A lender can tell you in one conversation what you actually may have access to for.
What closing costs add on top of your down payment
Your down payment is separate from closing costs. Closing costs are the fees you pay to the lender, title company, appraiser, and others to finalize the loan. On a $300,000 home, closing costs typically run $6,000 to $15,000, or 2% to 5% of the purchase price.
Common closing costs include the loan origination fee (1% of the loan amount), appraisal ($400 to $600), title search and insurance ($500 to $1,500), homeowners insurance (first year premium, $800 to $2,000), property taxes (varies by location), and attorney fees (if required in your state, $500 to $1,500).
Some lenders allow you to roll closing costs into the loan, which means you do not pay them upfront but you pay interest on them over 30 years. Others require you to pay them at closing. Ask your lender which costs are required upfront and which can be financed.
Many first-time buyers forget about closing costs and are surprised at closing. Budget for them separately from your down payment.
Frequently Asked Questions
Can I use a gift from family for my down payment?
Yes, most lenders allow down payment gifts from family members. You will need a gift letter stating the money is a gift, not a loan, and the lender will verify the funds came from the family member's account. Some lenders require the gift to come from a relative (spouse, parent, sibling, grandparent), while others are more flexible. Ask your lender about their gift policy before you accept the money.
Is it better to put down 3% or save up for 20%?
It depends on your situation. If you can reach 20% in a year or two without draining savings, waiting usually saves money because you avoid mortgage insurance. If it will take five or more years to save 20%, buying now with 3% or 5% down and paying mortgage insurance might make sense—you build equity while you save, and you can remove PMI later. Run the numbers with a lender for your specific case.
What if I do not have enough for a 3% down payment?
Some first-time buyer programs offer down payment help through grants or forgivable loans. These are run by state and local housing agencies, nonprofits, and sometimes employers. Search your state's housing finance agency website or call 211 to find programs in your area. Some programs cover part of the down payment; others cover closing costs. Availability and rules vary widely by location.
Does a larger down payment mean a better interest rate?
Usually yes, but not always by much. Lenders see a larger down payment as lower risk, so they may offer a rate 0.25% to 0.5% lower. On a $300,000 loan, that could save you $50 to $100 per month. But the difference is small enough that it is not the main reason to put down more. Your credit score, debt-to-income ratio, and the current market have much bigger effects on your rate.
Can I put down less than 3%?
Conventional loans rarely go below 3%. FHA loans go to 3.5%. VA and USDA loans go to 0% if you may have access to. Some state and local first-time buyer programs offer down payment help that can bring your out-of-pocket cost below 3%, but you still need to meet the lender's minimum. Talk to a lender about what is available in your state.