The range is 3 to 20 percent of the home price, depending on the loan type and your financial situation
There is no single "typical" down payment because what you put down depends on which loan program you use. A conventional loan usually requires 5 to 20 percent down. An FHA loan (Federal Housing Administration) allows 3.5 percent down. A VA loan (for military members and veterans) often requires zero down. A USDA loan (for rural properties) also allows zero down in many cases. The lower your down payment, the more you borrow, which means higher monthly payments and more interest paid over the life of the loan.
Most first-time buyers put down between 3 and 10 percent, not because it is ideal but because saving 20 percent takes years for many households. Putting down less than 20 percent on a conventional loan triggers private mortgage insurance (PMI), which is an extra monthly cost that protects the lender if you stop paying. This cost stays on your loan until you have paid down the principal to 80 percent of the original home price, or until you refinance.
Key Takeaways
- FHA loans let you start with 3.5 percent down, while conventional loans typically require at least 5 percent, and VA or USDA loans may require nothing.
- Putting down less than 20 percent on a conventional loan means paying private mortgage insurance each month until you reach 80 percent equity.
- Your down payment size affects your monthly payment, total interest cost, and how quickly you build equity in the home.
- The amount you can actually put down depends on your savings, not on what lenders prefer — lenders will accept anything from 3 to 20 percent on most programs.
How down payment size changes your monthly cost
A smaller down payment lowers the cash you need upfront but raises your monthly mortgage payment. On a $300,000 home at current interest rates, putting 3 percent down instead of 10 percent adds roughly $150 to $200 per month to your mortgage payment, plus the cost of PMI. Over 30 years, that difference compounds into tens of thousands of dollars in extra interest.
However, the math sometimes favors a smaller down payment. If you have $30,000 saved and a $300,000 home costs $9,000 down (3 percent), you keep $21,000 in emergency savings and investments. If you put all $30,000 down (10 percent), you have almost nothing left if your roof fails or you lose income. Lenders understand this trade-off, which is why they allow lower down payments — they know that borrowers who keep reserves are less likely to default.
Down payment requirements by loan type
| Loan Type | Minimum Down Payment | Who Can Use It | Mortgage Insurance Required |
|---|---|---|---|
| FHA | 3.5% | First-time and repeat buyers with credit score 580+ | Yes, for the life of the loan |
| Conventional | 3% to 5% | Buyers with credit score 620+ | Yes, until 20% equity reached |
| VA | 0% | Military members, veterans, surviving spouses | No |
| USDA | 0% | Buyers in rural areas, income limits explore | No |
FHA loans charge mortgage insurance for the entire 30-year loan, even after you reach 20 percent equity. This makes FHA more expensive long-term than conventional loans, but the 3.5 percent entry point helps buyers who cannot save more. Conventional loans drop PMI once you hit 80 percent equity, either through payments or through refinancing when your home value rises.
VA and USDA loans have no down payment and no mortgage insurance, but they come with their own costs — VA loans charge a funding fee (1.4 to 3.6 percent of the loan amount), and USDA loans charge a may provide fee. These fees are usually rolled into the loan, so you do not pay them upfront, but they increase what you borrow.
What affects how much you can actually put down
Your down payment is limited by how much you have saved, not by what lenders will accept. Most lenders will take anywhere from 3 to 20 percent down on a conventional loan. The constraint is your bank account. If you have saved $40,000 and the home costs $250,000, you can put down 16 percent. If you have saved $10,000, you can put down 4 percent.
Lenders do care about where the money comes from. They want to see that the down payment is your own money, not borrowed. If you receive a gift from a family member, most lenders allow it, but they require a signed letter from the gift-giver stating it does not need to be repaid. They will ask for bank statements showing the money sitting in your account for at least 60 days before closing, to confirm it is not a last-minute loan.
The trade-off between saving more and buying sooner
Waiting to save 20 percent down means no PMI, but it also means renting longer and missing years of building equity. If you rent for three more years to save an extra $50,000, you pay rent during those years and miss the chance to own. The home you could have bought three years ago may now cost 5 to 10 percent more. Sometimes buying sooner with 5 percent down and paying PMI for a few years is the better financial move than waiting.
The decision depends on your local market, your income growth, and your comfort with debt. In a market where prices rise 4 percent per year, waiting to save more often costs more than the PMI you would pay. In a flat market, waiting may make sense. There is no universal right answer — it depends on your situation.
Closing costs are separate from down payment
Your down payment is only part of what you need at closing. You also pay closing costs, which typically run 2 to 5 percent of the home price. These cover the appraisal, title search, title insurance, attorney fees, recording fees, and lender fees. On a $300,000 home, closing costs might be $6,000 to $15,000.
Some of these costs can be rolled into the loan (meaning you borrow them instead of paying them upfront), but not all. Lenders usually require you to pay the appraisal fee upfront, and some require a portion of property taxes and homeowners insurance upfront. Plan to have 5 to 10 percent of the home price available for down payment and closing costs combined.
Frequently Asked Questions
Can I borrow money for my down payment?
No. Lenders require that your down payment come from your own savings or from a gift. If you borrow the down payment, you are borrowing money to borrow money, which makes you a higher risk. Lenders will ask where the money came from, and a recent loan will disqualify you or force you to wait until it is paid off.
What happens if I put down less than 3 percent?
Conventional loans do not go below 3 percent. If you cannot save 3 percent, an FHA loan at 3.5 percent is your next option. If you cannot save that, you may need to wait, save more, or look at VA or USDA programs if you are may be able to access. Some lenders offer 2 percent down programs, but they are rare and come with higher interest rates and stricter credit requirements.
Does a bigger down payment mean a lower interest rate?
Usually yes, but the difference is small — often 0.25 to 0.5 percent. A larger down payment shows the lender you have skin in the game and are less likely to walk away. However, the interest rate also depends on your credit score, the loan type, and current market rates. Shop with multiple lenders to see how your down payment size affects the rate they offer.
Can I put down 20 percent and still get a good deal?
Yes. Putting down 20 percent eliminates PMI and often gets you a slightly lower interest rate. The trade-off is that you tie up more cash upfront. If you have the savings and do not need the money for emergencies or other goals, 20 percent down is a solid choice. If your savings are tight, 5 to 10 percent down and keeping reserves is often smarter.