Down payment and savings

How much down payment do you need for a house?

The smallest down payment that a loan program accepts and the down payment that is right for you are two different numbers. This guide gives you both the official minimums and a way to choose between them.

Reviewed November 2026 · Written for Buy Home Tips from the sources listed below

The CFPB's rule of thumb is that the larger your down payment, the lower your interest rate is likely to be and the more likely you are to be approved. It also warns that if you put down less than 20 percent, lenders usually require private mortgage insurance or a government-backed loan. Both statements are true at once, which is why choosing a down payment is a trade-off rather than a race to the biggest number.

Down payment in dollars on a $325,000 home. Illustrative price from this guide's worked example

Official minimums by program

FHA: HUD describes the minimum required investment as 3.5 percent in most cases. Borrowers with decision scores from 500 to 579 need at least 10 percent.
Fannie Mae HomeReady: down payments as low as 3 percent, with no minimum personal contribution and gifts, grants and certain second loans allowed.
Freddie Mac Home Possible: 3 percent down, a maximum 97 percent loan-to-value, and qualifying income limited to 80 percent of area median income.
VA: VA explains that the program does not require a down payment for eligible borrowers. Putting down 5 or 10 percent lowers the funding fee.
USDA guaranteed: 100 percent financing in eligible rural areas for households within the income limit.

Lenders may require more than the program minimum, and condos or multi-unit homes can have different rules.

What changes as the down payment grows

The CFPB explains that lenders use the loan-to-value ratio, which compares the loan with the appraised value, to decide whether to lend, whether mortgage insurance or a government-backed loan is required, and what rate to offer. A bigger down payment lowers the ratio, the loan amount and usually the monthly payment. On a conventional loan, it also shrinks or removes private mortgage insurance.

But every dollar you put down is a dollar that is no longer available for closing costs, moving, repairs or emergencies, and it is hard to get back out of a home quickly.

The cash beyond the down payment

The CFPB reminds buyers to factor in all the upfront costs: points if you buy down the rate, closing costs, moving and immediate repairs. Prepaid items such as the first year of homeowners insurance and the opening deposit into escrow are part of the cash to close too. Your earnest money deposit, paid soon after the offer is accepted, is usually credited toward that total at closing.

How to choose your number

Find the minimum for each program you qualify for.
Decide the cushion you want to keep after closing, in months of full housing payment.
Subtract the cushion and closing costs from your savings. What is left is your maximum down payment.
Ask lenders for Loan Estimates at two levels within that range and compare the total cost over the years you expect to keep the loan.

The calculator below shows the cash and loan-to-value at the common minimums for any price. Use your own closing cost estimate from a Loan Estimate as soon as you have one.

When the gap is large

If the cash you need is far from what you have, look at assistance programs in your state, gifts from family within program rules, a lower price range, or a longer timeline. The savings guides in this file and the assistance file explain each path.

Mini calculator: down payment options side by side

Enter a price to see the cash needed and the loan-to-value ratio at common minimum down payments.

Home price ($)

Estimated closing costs (% of price, from a Loan Estimate if you have one)

Enter your figures to see the result. Nothing you type leaves this page.

Closing costs vary by place and lender. Use the figure from your own Loan Estimate as soon as you have one.

Choose your down payment

Write down the program minimum for each loan type you qualify for.
Ask lenders for Loan Estimates at two down payment levels, such as 5 and 10 percent.
Compare the monthly payment, mortgage insurance and total cost over the years you expect to stay.
Subtract the down payment and closing costs from your savings and see what is left.
Keep a cushion that covers several months of the full housing payment.

Questions buyers ask

What is the minimum down payment for a first home?

It depends on the program. FHA's minimum is 3.5 percent in most cases, HomeReady and Home Possible allow 3 percent for eligible borrowers, and VA and USDA guaranteed loans can require no down payment for those who qualify. Lenders may ask for more.

Is 20 percent down worth waiting for?

Not always. Twenty percent avoids private mortgage insurance on a conventional loan and may lower the rate, but saving it can take years while prices and rents move. Compare the cost of mortgage insurance with the cost of waiting.

Does the down payment include closing costs?

No. Closing costs and prepaid items are separate. Your Loan Estimate shows both, and your total cash to close combines them, minus any deposit and credits.

Can I put down less and pay extra later?

Yes. Many buyers keep more savings at closing and then make extra principal payments once their cushion is rebuilt, which can also bring forward the date to request PMI cancellation on a conventional loan.

Sources checked for this page

Checked November 2026. Programs and limits change; confirm with the source before you rely on a figure.