Down Payment on a House: How Much Do You Really Need?

Most people think they need 20% down to buy a house. That belief stops a lot of would-be homeowners from even starting the process.

The reality is very different. According to the National Association of Realtors, the median down payment for all home buyers is around 15% of the purchase price. First-time buyers put down a median of just 10%, and many loan programs let you start with as little as 3% or even 0% down.

This guide breaks down exactly how much you need for a down payment on a house, what each loan type requires, and how to get the money together faster.

The average down payment on a house depends heavily on whether you are a first-time or repeat buyer.

Based on the latest NAR data:

• First-time home buyers put down a median of 10%
• Repeat home buyers put down a median of 23%
• The overall median across all buyers is about 15%, or roughly $62,000 based on the median U.S. home sale price of around $398,000

Down payments also vary by age group. Buyers ages 22 to 30 put down about 6%, those ages 31 to 40 put down 10%, and buyers ages 41 to 55 average around 13%.

The minimum down payment on a house depends on the type of mortgage you choose. Here is a breakdown of the main loan programs:

The most popular loan type is a conventional mortgage, and many lenders now offer conventional loans with just 3% down for first-time buyers through programs like Fannie Mae HomeReady and Freddie Mac Home Possible.

FHA loans are another popular choice, especially for buyers with lower credit scores. With a score of 580 or above, you only need 3.5% down. Below 580, the minimum jumps to 10%.

VA and USDA loans stand out because they require no down payment at all, though they come with specific eligibility requirements.

A "good" down payment depends on your financial situation, not a fixed number. The old rule of putting 20% down made sense when mortgage insurance was unavoidable, but today there are smart reasons to put down less.

The case for 20% or more:

• You skip private mortgage insurance entirely
• Lower monthly payments and less total interest paid
• Stronger offer in competitive markets
• More equity from day one, which protects you if home values dip

The case for a smaller down payment:

• You get into the housing market sooner and start building equity
• You keep more cash for emergencies, repairs, and moving costs
• Home prices have been rising about 2% annually, so waiting to save 20% could mean chasing a moving target
• Your savings can work harder in other investments

For most first-time buyers, putting down 5-10% and accepting PMI until you reach 20% equity is a reasonable middle ground. The key is making sure your monthly payment (including PMI, taxes, and insurance) stays comfortable within your budget.

Use the 28/36 rule as a starting point: spend no more than 28% of your gross monthly income on housing costs, and no more than 36% on total debt. If you want to dig deeper into what you can afford, check out our guide on how much of your income should go to your mortgage.

When you put less than 20% down on a conventional loan, your lender requires private mortgage insurance (PMI). This protects the lender if you stop making payments. It does not protect you.

PMI typically costs between 0.5% and 1.5% of the original loan amount per year. On a $380,000 loan, that translates to roughly $158 to $475 per month.

The good news is that PMI is temporary on conventional loans:

• Automatic cancellation happens when your loan-to-value ratio hits 78% through regular payments
• You can request cancellation once your LTV reaches 80%, though the lender may require an appraisal
• Refinancing is another option once you have 20% equity

A bigger down payment usually gets you a better interest rate. When you have more cash invested in the property, the lender takes on less risk, and they pass that savings along to you.

As of March 2026, average 30-year fixed mortgage rates sit around 6.1%. The actual rate you receive depends on your credit score, down payment percentage, loan type, and debt-to-income ratio.

Here is a rough comparison of how different down payments affect a $400,000 purchase:

• 3% down ($12,000): $388,000 loan at roughly 6.5% = about $2,452/month (plus ~$280/month PMI)
• 10% down ($40,000): $360,000 loan at roughly 6.25% = about $2,217/month (plus ~$200/month PMI)
• 20% down ($80,000): $320,000 loan at roughly 6.0% = about $1,919/month (no PMI)

Over 30 years, the 20% down payment saves you roughly $190,000 in total payments compared to putting just 3% down. But that requires $68,000 more upfront, plus the opportunity cost of tying up that cash.

More home equity from the start also means you can borrow against it sooner for renovations or other investments.

Saving for a down payment feels overwhelming until you break it into concrete steps. Here are strategies that actually work:

Saving from your own income is not the only option. Lenders accept down payment funds from several approved sources:

If saving for a down payment feels out of reach, you are not alone. Over 2,000 down payment assistance programs exist across the United States, and most buyers do not even know they qualify.

These programs typically fall into four categories:

• Grants that do not need to be repaid (free money toward your down payment)
• Forgivable loans that are forgiven after you live in the home for a set period (usually 5 to 10 years)
• Deferred-payment loans with no payments required until you sell, refinance, or move
• Low-interest loans that you repay alongside your mortgage

Some notable programs in 2026 include:

• Bank of America Down Payment Grant: Up to 3% of the purchase price (max $10,000) for qualifying buyers
• Fannie Mae HomeReady: Allows 3% down with income from boarders and non-borrower household members counted
• FHA loans with state-level DPA: Many states pair FHA financing with their own assistance programs
• CalHFA Dream For All (California): Shared appreciation loan for first-generation homebuyers
• IHDA Access Home (Illinois): Up to $15,000 in down payment and closing cost assistance

Visit downpaymentresource.com to search for programs in your area by zip code.

Your credit score and down payment requirements are directly connected. Higher scores unlock lower down payment options and better interest rates.

Here is how the main loan programs break down by credit score:

• Conventional loans: Most lenders require a 620 FICO score minimum for 3% down programs. Scores above 740 get the best rates.
• FHA loans: 580+ qualifies you for 3.5% down. Scores between 500 and 579 require 10% down.
• VA loans: The VA does not set a minimum credit score, but most lenders require at least 620.
• USDA loans: Most lenders look for a 640 score minimum.

If your score is on the lower end, improving it before you apply can save you thousands. Even a 20-point increase could move you from the 10% FHA tier to the 3.5% tier, potentially saving $26,000 on a $400,000 purchase.

Learn more about what credit score you need to buy a house.

Your down payment is not your only upfront cost. Closing costs typically add another 2% to 5% of the purchase price, covering things like appraisal fees, title insurance, origination fees, and prepaid property taxes.

On a $400,000 home, expect closing costs between $8,000 and $20,000 on top of your down payment. Some of these costs are negotiable, and the seller can sometimes contribute toward them (seller concessions).

Make sure your savings target accounts for both the down payment and closing costs. Running out of cash right before closing is one of the most common reasons deals fall through.