Last updated: October 5, 2026 · Interest and PMI rates in the examples are illustrations, not quotes.
The idea that you need 20% down to buy a home stops many people from even trying. In reality, most loan programs allow much less, and some require nothing at all. The real question is not the minimum you can put down, but how much you should put down given your savings and monthly budget.
Minimum down payments by loan type
| Loan type | Minimum down payment | Notes |
|---|---|---|
| Conventional | 3% on some programs | Programs such as Fannie Mae HomeReady and Freddie Mac Home Possible, plus 3%-down options for first-time buyers. PMI required below 20%. |
| FHA | 3.5% | With a credit score of 580 or higher; 10% with 500–579. Upfront and annual mortgage insurance. |
| VA | 0% | For eligible service members, veterans and some surviving spouses. Funding fee usually applies. |
| USDA | 0% | For eligible homes in qualifying rural and suburban areas, with income limits. |
How your down payment changes the monthly cost
Here is a $350,000 home with a 30-year fixed conventional loan at 6.5%. PMI rates are examples; yours will depend on your credit score.
| Down payment | Cash needed | Loan | P&I | Example PMI | Monthly total | Total interest (30 yrs) |
|---|---|---|---|---|---|---|
| 3% | $10,500 | $339,500 | $2,145.87 | $226.33 | $2,372.20 | $433,014 |
| 5% | $17,500 | $332,500 | $2,101.63 | $166.25 | $2,267.88 | $424,085 |
| 10% | $35,000 | $315,000 | $1,991.01 | $105.00 | $2,096.01 | $401,765 |
| 20% | $70,000 | $280,000 | $1,769.79 | $0 | $1,769.79 | $357,125 |
PMI examples use 0.8% (3% down), 0.6% (5%) and 0.4% (10%) of the loan per year. Property tax and insurance are extra and do not depend on the down payment.
Going from 3% to 20% down costs $59,500 more upfront but lowers the monthly payment by about $602 and saves about $75,900 in interest over 30 years. PMI is temporary, though; learn when it ends in what PMI is and how to get rid of it.
Don’t forget the other cash you need
- Closing costs: typically 2% to 5% of the loan. See mortgage closing costs explained.
- Reserves: some lenders want to see a few months of payments left in savings after closing.
- An emergency fund: homes come with surprise repairs. Putting every dollar into the down payment can leave you exposed.
- Moving and setup costs: movers, furniture, utility deposits.
Should you wait to save 20%?
Waiting has costs too: you keep paying rent, and home prices and rates may change while you save. Buying sooner with less down can make sense if the monthly payment is comfortable, you have an emergency fund, and you plan to stay long enough to build equity. Waiting can make sense if a bigger down payment would move you into a much better rate or keep your payment within the guidelines in how much house you can afford.
Ways to come up with a down payment
- Down payment assistance from state and local housing finance agencies, often as grants or forgivable loans for first-time buyers.
- Gift funds from family, with a gift letter and documentation.
- Employer housing benefits, offered by some employers.
- Retirement account options, such as certain IRA withdrawals for first-time buyers or 401(k) loans. These have tax and retirement trade-offs, so talk to a tax professional first.
Comparing FHA and conventional loans for a small down payment? See FHA vs. conventional loan. To test different down payments on your target home, use our mortgage calculator.
Frequently asked questions
What is the minimum down payment to buy a house?
It depends on the loan. Some conventional programs allow 3% down, FHA loans allow 3.5% with a credit score of 580 or higher, and VA and USDA loans can require no down payment for eligible borrowers.
Do I need 20% down to buy a house?
No. Twenty percent down avoids private mortgage insurance on a conventional loan, but many buyers put down much less. The trade-off is a higher monthly payment and mortgage insurance until you build enough equity.
How much should I put down on a house?
Enough to keep the monthly payment comfortable while still leaving an emergency fund and money for closing costs and moving. For many buyers that is less than 20%.
Can I use gift money for a down payment?
Most loan programs allow down payment gifts from family members, usually with a signed gift letter and documentation showing where the money came from. Rules vary by program and lender.
Sources: CFPB: Buying a House; HUD; Freddie Mac: Breaking down PMI. Example calculations by ToolStackIA.
This article is for educational purposes only and is not financial advice. Loan programs, rates and rules change; confirm details with your lender or a HUD-approved housing counselor.