The short answer: 3% to 20% of the purchase price, depending on the loan type
There is no single right down payment amount. The percentage you put down depends on which loan program you use, how much cash you have available, and what trade-offs make sense for your situation. A down payment is the money you give the seller at closing — the rest of the purchase price comes from a loan (called a mortgage) that you repay over time.
The lower your down payment, the less cash you need upfront, but the higher your monthly payment and the more interest you pay over the life of the loan. The higher your down payment, the lower your monthly payment, but the more cash you tie up in the house instead of keeping it available for emergencies or other needs.
Most people do not have to choose between these extremes. The most common down payments are 10%, 15%, or 20% — but loans exist that accept 3% or even less.
Key Takeaways
- FHA loans allow down payments as low as 3.5%, while conventional loans often require 5% to 20%, depending on your credit score and income.
- Putting down less than 20% usually means paying mortgage insurance (PMI), which adds to your monthly payment until you reach 20% equity in the home.
- A larger down payment lowers your monthly payment and total interest paid, but uses cash you could keep for emergencies or other purposes.
- Your credit score, debt level, and savings affect which down payment amounts are actually available to you, not just which ones are theoretically possible.
How down payment size affects your monthly payment and total cost
The down payment you choose directly changes two numbers: your monthly mortgage payment and the total amount of interest you pay. Here is how it works with a concrete example.
Say you are buying a house for $300,000 and taking out a 30-year loan at 7% interest. If you put down 3% ($9,000), you borrow $291,000, and your monthly payment is roughly $1,935. If you put down 20% ($60,000), you borrow $240,000, and your monthly payment is roughly $1,596. The difference is $339 per month — or about $4,000 per year.
Over 30 years, the 3% down scenario costs you roughly $696,600 in total payments (principal plus interest). The 20% down scenario costs roughly $574,560. The difference is about $122,000 — money that goes to the lender instead of staying in your pocket.
But that $51,000 difference in down payment is cash you would not have available for a job loss, a medical emergency, or a major home repair. That trade-off is real and worth thinking through.
Mortgage insurance: the cost of putting down less than 20%
If you put down less than 20%, your lender requires you to pay mortgage insurance — a monthly fee that protects the lender if you stop paying. This is not homeowners insurance (which protects your house from fire or theft). It is insurance on the loan itself.
The cost of mortgage insurance varies. On an FHA loan, it is typically 0.55% to 0.80% of your loan amount per year, added to your monthly payment. On a conventional loan, it is usually 0.5% to 1.5% per year, depending on how much you put down and your credit score. The lower your down payment, the higher the insurance rate.
Using the $300,000 house example again: if you put down 5% and take a conventional loan, you might pay roughly $150 to $200 per month in mortgage insurance. That stays on your bill until you reach 20% equity in the home — which takes years, even as you make payments.
You can remove mortgage insurance once you have paid down the loan to 80% of the original purchase price, but you have to request it. Some lenders remove it automatically once you hit that mark; others require you to ask. Check your loan documents or call your lender to find out the rule for your specific loan.
Down payment requirements by loan type
Different loan programs have different minimum down payments. Your credit score, income, and debt level determine whether you actually may have access to for the minimum, but here is what each program allows.
| Loan Type | Minimum Down Payment | Who Offers It | Mortgage Insurance Required? |
|---|---|---|---|
| FHA loan | 3.5% | Banks and mortgage lenders (government-insured) | Yes, for the life of the loan |
| VA loan | 0% (if you may have access to) | Banks and mortgage lenders (for military and veterans) | No |
| USDA loan | 0% (if you may have access to) | Banks and mortgage lenders (for rural areas) | Yes, but can be rolled into the loan |
| Conventional loan | 3% to 20% | Banks and mortgage lenders | Yes, if down payment is less than 20% |
FHA loans are the most common option for people with limited savings or lower credit scores. The 3.5% minimum is the lowest you will find in standard lending. However, FHA mortgage insurance stays on your loan for the full 30 years (or the life of the loan), even after you reach 20% equity. This makes FHA loans more expensive in the long run if you plan to stay in the house for many years.
VA and USDA loans have no down payment requirement if you meet the may be able to access criteria — military service for VA loans, and living in a may have access to rural area for USDA loans. These are powerful tools if you can use them, because you avoid both the down payment and mortgage insurance.
Conventional loans are the most flexible. You can put down anywhere from 3% to 25% or more, and mortgage insurance drops off once you reach 20% equity. If you have a good credit score and stable income, conventional loans often have lower interest rates than FHA loans, which can offset the cost of mortgage insurance in the short term.
What lenders actually look at when deciding your down payment options
Your credit score is the biggest factor. Lenders use it to decide whether to offer you a loan at all, and at what interest rate. A score above 740 opens up the most options and the lowest rates. A score between 620 and 680 limits you to FHA loans or conventional loans with a higher down payment (usually 10% or more). Below 620, FHA is often your only choice.
Your debt-to-income ratio matters just as much. This is the total of all your monthly debt payments (car loans, student loans, credit cards, child support) divided by your gross monthly income. Most lenders want this to be 43% or lower. If you have high debt already, you may need a larger down payment to offset the risk in the lender's eyes.
Your savings matter too. Lenders want to see that you have money left over after the down payment — usually enough to cover two to three months of mortgage payments. This shows you can handle an emergency without defaulting on the loan. If you put down every penny you have, some lenders will deny you or require a larger down payment.
How to decide what down payment makes sense for you
Start by figuring out how much cash you can afford to put down without leaving yourself vulnerable. A good rule of thumb: keep at least three to six months of living expenses in savings after the down payment. If you have $50,000 saved and your monthly expenses are $4,000, you should keep $12,000 to $24,000 in the bank. That leaves $26,000 to $38,000 available for a down payment.
Next, get pre-approved for a mortgage. A lender will tell you the exact down payment options available to you based on your credit, income, and debt. Do not rely on general rules — your situation is specific, and a lender's pre-approval letter will show you what is actually possible.
Then compare the monthly payment and total cost across your options. A mortgage calculator can show you the difference between 5%, 10%, 15%, and 20% down on the specific house price and interest rate you are looking at. Plug in the mortgage insurance cost too, so you see the real monthly number.
Finally, think about your life situation. If your job is stable and you have good emergency savings, a smaller down payment might make sense — you keep cash available and the monthly payment is lower. If your income is variable or you are worried about job security, a larger down payment reduces your monthly obligation and gives you more breathing room.
Common mistakes to avoid
The biggest mistake is putting down more than you can afford to lose. A house is an asset, but it is not liquid — you cannot quickly turn it into cash if you need money. If you drain your savings for a down payment and then face a job loss or medical emergency, you may end up unable to pay the mortgage. Lenders know this, which is why they check your remaining savings.
Another mistake is assuming mortgage insurance is temporary. On FHA loans, it is not — it stays for the life of the loan. If you are planning to stay in the house for 20+ years, that adds up to tens of thousands of dollars. Run the numbers before choosing FHA.
A third mistake is not shopping around for interest rates. A 0.5% difference in interest rate changes your monthly payment by $100 to $200 on a $300,000 loan. Different lenders offer different rates, and your down payment size can affect the rate you get. Get quotes from at least three lenders before deciding.
Frequently Asked Questions
Can I borrow money from family for a down payment?
Yes, but lenders have rules about it. If the money is a gift (not a loan you have to repay), the lender usually requires a signed letter from the family member stating it is a gift and does not need to be repaid. If it is a loan, you have to count the monthly payment as debt when calculating your debt-to-income ratio, which may reduce how much you can borrow for the mortgage itself.
What happens if I put down less than 3%?
Standard mortgage programs do not allow it. Some lenders offer "bank portfolio loans" (loans they keep rather than sell) with 1% or 2% down, but these are rare, carry higher interest rates, and require excellent credit and income. For most people, 3% is the practical floor.
Can I increase my down payment after I get pre-approved?
Yes. Pre-approval is not a lock-in. If you save more money or decide a larger down payment makes sense, you can increase it at closing. Just tell your lender before you sign the final papers so they can adjust the loan amount and your monthly payment.
Does a larger down payment help me get a better interest rate?
Sometimes. A larger down payment shows lower risk to the lender, which can result in a slightly lower interest rate — usually 0.25% to 0.5% lower. But the difference is small. A better credit score and shopping around for rates usually saves you more money than a larger down payment does.
What if I cannot save 3% before I want to buy?
Some employers, nonprofits, and government programs offer down payment help — grants or forgivable loans that do not have to be repaid. Search your city or county name plus "down payment information" to see what is available where you live. may be able to access varies widely by location and income.