Down payments on a home loan can range from 0% to 20% or more, depending on the loan type, the property, and a buyer's credit and finances.
Down payments on a home loan can range from 0% to 20% or more, depending on the loan type, the property, and a buyer's credit and finances. There's no single number every buyer has to hit.
Before deciding how much to put down, it helps to know how much house you can actually afford and to have a realistic plan for saving for a down payment already underway, since that number changes which loan options are available.
The right amount to put down is ultimately a mortgage decision that balances the monthly payment, how much cash stays in reserve, and how competitive an offer needs to be in a given market.
Debunking the 20% down payment myth
The 20% figure comes from an old rule of thumb and is not a specific requirement to obtain a mortgage.
It originally mattered because putting down at least that much meant skipping private mortgage insurance on a conventional loan—but many buyers today put down far less and still qualify for competitive rates and terms.
Landing below 20%, though, doesn't mean the down payment is the only cash a buyer needs on hand.
"Buyers see X% down and assume that's what they will need," says Ashley Harris, director of homebuyer education at Neighbors Bank. "If their lender or agent hasn't educated them on closing costs, those can be a surprise."
A buyer’s closing costs include the lender's fees to complete the loan, the first year of homeowners insurance, the startup of an escrow account for future taxes and insurance, and title fees to complete the search and closing. Those add up—but Harris notes they can sometimes be negotiated into the seller's side of the deal.
"These fees can be negotiated to be paid by a seller as part of your offer," Harris says. "This can be a great strategy for first-time buyers who may be short on reserves, especially alongside a [down payment assistance program] in a buyer's market."
Minimum down payment requirements by loan type
Down payment minimums and other requirements may vary significantly by loan type.
Conventional loans can go as low as 3% for qualifying buyers, FHA loans require 3.5% with a credit score of 580 or higher, and both VA and USDA loans allow 0% down for buyers who meet the eligibility requirements. Jumbo loans sit at the other end of the spectrum: Since they exceed the conforming loan limits set each year by the Federal Housing Finance Agency, lenders typically want a larger down payment, often 10% to 20% or more, along with stronger credit and cash reserves.
In general, home loan options beyond the standard 20% assumption exist for nearly every kind of buyer. The trade-off is usually in the insurance or fees attached to the loan, not the ability to qualify at all. “Minimum” is also an important word here, as plenty of buyers choose to put down more than required simply to lower the monthly payment or strengthen an offer in a competitive market.
(Realtor.com) Private mortgage insurance: What it costs and how it works
PMI, short for private mortgage insurance, protects the lender if a borrower defaults—not the buyer. It applies to conventional loans with less than 20% down, and typically costs between 0.5% and 1.5% of the loan amount per year, split into the monthly payment. Lenders are required to automatically cancel PMI once the loan balance drops to 78% of the home's original value, and buyers can request cancellation earlier, once they hit 80%, as long as the loan is in good standing.
A stronger credit score can also lower the PMI rate itself, which is one more reason it can help to clean up your credit score before applying.
Down payment assistance programs for first-time buyers
Down payment assistance programs are grants, forgivable loans, or low-interest second loans that cover some or all of a buyer's down payment, and sometimes closing costs. They're typically run by state or local housing agencies, though some come from nonprofits or employers, and eligibility often depends on income limits, first-time buyer status, or the specific location of the home.
This type of assistance is more available than most buyers realize.
"Down payment assistance programs are commonly used for first-time buyers," Harris says. "There are over 2,700 down payment assistance programs in the United States. Some are repayable and some are forgivable. Many can be used for closing costs and the down payment."
The average benefit across these programs runs around $18,000, Harris says, though the specifics vary by program and location.
How your down payment affects monthly payments and rates
A bigger down payment reduces the loan amount, which directly lowers the monthly principal and interest payment—put down more, borrow less. It can also help a buyer qualify for a lower interest rate, since a smaller loan relative to the home's value signals less risk to the lender, and on a conventional loan, crossing the 20% threshold eliminates PMI altogether.
That said, a bigger down payment isn't automatically the right move for every buyer. Harris recommends starting with a full household budget rather than the down payment amount itself.
"I always ask people to consider and add up everything they pay monthly, on and off of the credit report," Harris says. "Things like dance class, daycare, auto insurance, streaming services, groceries, gym memberships. Then decide what feels comfortable for a payment."
If a buyer can hit that comfortable payment without stretching for a bigger down payment, Harris says, it may be smarter to keep the extra cash in reserve.
"You never know when you're going to have unexpected expenses come up, especially with a new home," Harris says.
Running a few potential homebuying scenarios through a mortgage calculator or an affordability calculator can make that trade-off concrete. These tools show exactly how much a larger down payment would lower the monthly payment, and whether that's worth pulling from savings to get there.
Frequently asked questions
Do you really need 20% down to buy a house?
No. Conventional loans can go as low as 3% down, FHA loans require 3.5%, and VA and USDA loans allow qualifying buyers to put down 0%. Twenty percent is the threshold for skipping private mortgage insurance on a conventional loan, not a requirement to qualify.
What is the minimum down payment for a first-time homebuyer?
It depends on loan type, but many first-time buyers qualify for 3% down through conventional programs or 3.5% down through FHA. Buyers using a USDA or VA loan may qualify for 0% down.
What is PMI and when can you remove it?
Private mortgage insurance protects the lender on a conventional loan when a buyer puts down less than 20%. Lenders are required to cancel it automatically once the loan balance reaches 78% of the home's original value, and buyers can request cancellation once they reach 80%.
Can down payment funds come from a gift?
Yes, for most loan types, though lenders typically require a gift letter confirming the money doesn't need to be repaid, and some loan types limit how much of the down payment can come from a gift versus the buyer's own funds.
How does down payment amount affect closing costs?
Down payment and closing costs are calculated separately—closing costs typically run 2% to 5% of the loan amount regardless of how much is put down—but a larger down payment can sometimes reduce certain lender fees tied to the loan amount.