How much down payment do you need?
Minimum down payments by loan type, and what a larger down payment does for your payment and PMI.
Sourced from official pages · Updated September 30, 2026💡 Key takeaways
- Minimums range from 0% (VA, USDA) to 3–3.5% (conventional programs, FHA) to 20% (to avoid PMI on conventional loans).
- A larger down payment lowers the loan amount, the monthly payment and total interest.
- With less than 20% down, conventional loans usually require PMI until the balance reaches 80% (request) or 78% (automatic) of the original value.
- You also need cash for closing costs and reserves.
Minimums by loan type
| Loan | Typical minimum down payment |
|---|---|
| Conventional (HomeReady / Home Possible) | As low as 3% |
| FHA | 3.5% |
| VA | None required for eligible borrowers |
| USDA | None (100% financing possible) |
| Conventional, no PMI | 20% |
What a larger down payment changes
- Smaller loan amount, so lower monthly principal and interest.
- On conventional loans, 20% down generally avoids PMI; less than 20% usually requires it until the balance reaches 80% (request) / 78% (automatic) of the original value.
- Less total interest over the life of the loan.
Remember closing costs and reserves too; the down payment is not the only cash you need.
Test your numbers
Change the “Down payment” slider in the mortgage calculator to see the payment, PMI and total interest, or use the affordability calculator to see what price your income supports.
What down payment looks like in dollars
| Purchase price | 3% down | 3.5% down (FHA) | 5% down | 20% down |
|---|---|---|---|---|
| $250,000 | $7,500 | $8,750 | $12,500 | $50,000 |
| $400,000 | $12,000 | $14,000 | $20,000 | $80,000 |
| $600,000 | $18,000 | $21,000 | $30,000 | $120,000 |
Where the money can come from
Savings, a gift from an eligible family member (lenders require documentation), certain down-payment assistance programs and, in some cases, retirement account loans. Ask each lender which sources they accept and how to document them.
Balance the down payment against reserves
Using every dollar for the down payment can leave you exposed to repairs or a job change. Keep an emergency fund after closing.
🔤 Key terms
| Term | Meaning |
|---|---|
| Loan-to-value (LTV) | The loan as a percentage of the home’s value |
| Cash reserves | Money left after closing, which some lenders require |
| Gift funds | Down payment money given by an eligible person, usually documented |
| Down payment assistance | Programs that help eligible buyers with the down payment or closing costs |
Scenarios
| Scenario | Consider |
|---|---|
| You have 5% saved | Compare FHA and low-down-payment conventional loans and the resulting mortgage insurance |
| You have 20% saved | A conventional loan can avoid PMI; keep reserves |
| You are a veteran | VA loans can allow no down payment |
⚠️ Common mistakes to avoid
- Emptying savings to reach 20% and having no reserves.
- Forgetting that closing costs are separate from the down payment.
- Not documenting gift funds properly.
- Assuming you must put 20% down.
🛠️ Try it yourself
❓ Frequently asked questions
How much should I put down?
It depends on your goals: a smaller down payment gets you in sooner but costs more each month in interest and insurance; a larger one reduces costs.
Can I remove PMI later?
Often yes; see the PMI guide.
Do I need a down payment for VA or USDA loans?
Not for eligible borrowers.
Can I use retirement savings?
Some plans allow loans or withdrawals, with taxes or penalties in some cases; get advice first.
Is there down payment help?
Some state and local programs exist; search your state housing agency.
📚 Sources
This guide is general information, not financial, tax or legal advice. Rules and limits change; confirm with the sources above or a licensed professional.