How Much Should I Put Down on a House?

Crystal 

Walker

Content Writer

Most buyers don't need 20 percent to buy a home. Conventional loans allow as little as 3 percent down for qualifying first-time buyers, FHA loans require 3.5 percent, and VA and USDA loans require none at all. The right amount depends on your loan program, your monthly payment tolerance, and how much cash you want left over after closing.

The 20 percent figure isn't a legal requirement, and it never was. It's a benchmark that avoids mortgage insurance and builds equity fast, which is exactly why people keep repeating it. But treating it as the entry price for a mortgage keeps plenty of qualified buyers renting years longer than they need to. Your down payment is only one piece of what you'll need at closing, so it helps to look at it alongside the full picture of how much money you actually need to buy a house.

What Do Most Buyers Actually Put Down?

The national picture splits sharply along one line: whether you've owned a home before. According to the National Association of Realtors' 2025 Profile of Home Buyers and Sellers, the median down payment across all buyers reached 19 percent, the highest level in decades. Repeat buyers are pulling that number up. Their median down payment is 23 percent, largely funded by equity from a home they already sold. First-time buyers land somewhere else entirely, with a median down payment closer to 10 percent, and NAR reports that roughly a third of them describe saving for it as the hardest part of buying a home.

What Down Payment Does Your Loan Type Require?

Loan programs set a hard floor, and the floor varies more than most buyers assume.

Conventional Loans

A conventional loan can go as low as 3 percent down for qualifying first-time buyers through Fannie Mae's HomeReady or Freddie Mac's Home Possible programs. Buyers outside those programs typically see 5 percent as the practical starting point instead.

FHA Loans

FHA loans require 3.5 percent down with a credit score of 580 or above. Drop below that score, into the 500 to 579 range, and the required down payment jumps to 10 percent. For the full picture on qualifying, income limits, and mortgage insurance, see the complete guide to FHA loan requirements.

VA and USDA Loans

Eligible veterans, active-duty service members, and surviving spouses can buy with zero down through a VA loan, and no mortgage insurance applies at all. USDA loans offer the same zero-down structure for buyers in designated rural and suburban areas who meet the program's income limits.

Jumbo Loans

Loans above the conforming limit, which sits at roughly $832,750 in most areas for 2026, are jumbo loans, and lenders typically want 10 to 20 percent down on these because of the added risk.

Your credit score, income, and the property itself all determine which of these you actually qualify for. A single call to a loan officer will tell you your real floor faster than any article can.

What Happens If You Put Down Less Than 20 Percent?

On a Conventional Loan

You'll pay private mortgage insurance, or PMI, until your equity reaches roughly 20 percent. PMI typically costs between 0.3 and 1.5 percent of your loan amount per year, depending on your credit score and down payment size. On a $350,000 loan, that works out to somewhere between $87 and $437 a month. It doesn't last forever: your lender must automatically cancel PMI once your balance reaches 78 percent of the home's original value, under the federal Homeowners Protection Act, and you can request cancellation yourself once you hit 80 percent.

One recent change is worth flagging. Starting with the 2026 tax year, PMI premiums became deductible again as mortgage interest, after the deduction had expired at the end of 2021. Income limits apply, so it won't help every buyer, but it shifts the math for anyone weighing PMI purely on cost.

On an FHA Loan

FHA mortgage insurance, called MIP, plays by a different set of rules. If your down payment is under 10 percent, which covers most FHA borrowers given the 3.5 percent minimum, MIP stays on the loan for its entire term. There's no equity threshold that removes it. Put down 10 percent or more, and MIP automatically cancels after 11 years of payments instead. This is one of the more overlooked reasons buyers who qualify for both FHA and a low-down-payment conventional loan often choose conventional: the insurance eventually goes away on its own.

Is a Bigger Down Payment Actually Better?

A larger down payment lowers your monthly payment, can help you land a better interest rate since lenders treat bigger down payments as lower risk, and builds equity immediately. Those benefits are real, and they're why 20 percent became the number everyone quotes.

They come at a cost, though. Dollars that go toward a bigger down payment stop being available for anything else. If reaching 20 percent means draining your emergency fund, you've traded a lower insurance bill for a much thinner cushion, and a dead furnace or a slow month at work will hurt a lot more without one. That cash is also locked in home equity instead of earning interest anywhere else, and in a market where prices are climbing, the months you spend saving toward a bigger down payment can cost more in rising home prices than they save in PMI.

Smaller down payments carry their own downside. You'll finance more of the purchase, your monthly payment will run higher, and PMI or MIP will apply until you build equity. Neither path is the obviously smart one. It depends entirely on what you're optimizing for.

A Real Example

Picture two buyers purchasing identical $400,000 homes with the same 30-year fixed rate. One puts down 20 percent ($80,000), skips mortgage insurance entirely, and ends up with a lower monthly payment, but she's used nearly all of her savings to get there. The other puts down 5 percent ($20,000), pays roughly $150 a month in PMI on top of a higher principal and interest payment, and still walks into closing with $60,000 left in the bank. Neither is the wrong call. The first buyer optimized for monthly cost. The second optimized for cash on hand and moved five or six months sooner than she otherwise could have. What decides which path fits you is what happens the week your car needs a new transmission.

What People Get Wrong About This Decision

The common mistake isn't putting down too little money. It's treating the down payment as the whole budget. Buyers who stretch to hit 20 percent often forget closing costs, which typically run 2 to 5 percent of the purchase price on top of the down payment, and they forget the repairs and moving expenses that show up in the first few months. A 20 percent down payment that leaves you with a few hundred dollars in checking is a weaker position than a 10 percent down payment backed by a real reserve.

How to Decide What's Right for You

1. Check your loan program's actual minimum before assuming you need 20 percent. This gives you your real floor.

2. Price out PMI or MIP at a few different down payment levels. A lender or an online calculator can show you the true monthly gap between 5, 10, and 20 percent down.

3. Protect your emergency fund. Most advisors recommend keeping three to six months of expenses in reserve, separate from your down payment.

4. Budget for closing costs and the first few months of homeownership before you lock in a down payment number.

5. Get pre-approved before you start touring homes. It will show you what your options look like at different down payment amounts based on your actual credit and income, not a rule of thumb.

Talk to a lender about the numbers, and talk to an agent who knows your market about timing. Between the two, you'll have a clearer answer than any general guideline can give you. 

For more on the full buying process, visit our Buying a Home learning center. 

_{Disclaimer: This article is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Always consult a licensed professional before making decisions based on this information.}