How Much Down Payment Do You Need for a House?
Compare 3%, 5%, 10% and 20% down: the cash you need, the monthly payment with PMI, and how long it takes to save, with a free calculator.
Published
Free tool: Down Payment CalculatorThe 20% down payment is famous, but most buyers aren't required to make one, and it isn't always the best choice. A bigger down payment lowers your monthly payment and avoids PMI; a smaller one gets you into a home years sooner. This guide compares the options with real numbers, using the free Down Payment Calculator.
How much cash you need
Your upfront cash is the down payment plus closing costs, which often run 2% to 5% of the price. For a $400,000 home with closing costs of 3% ($12,000):
| Down payment | Cash needed | Monthly payment |
|---|---|---|
| 3% ($12,000) | $24,000 | $2,614.09 |
| 5% ($20,000) | $32,000 | $2,560.19 |
| 10% ($40,000) | $52,000 | $2,425.44 |
| 20% ($80,000) | $92,000 | $2,022.62 |
The monthly payments are principal and interest at 6.5% over 30 years, plus PMI at 0.5% a year below 20% down. Property tax, insurance and HOA fees come on top.
What 20% down buys you
Going from 10% to 20% down in the example takes $40,000 more up front and lowers the payment by about $403 a month: about $253 from the smaller loan and $150 from dropping PMI. You also start with more equity, which helps if prices dip or you need to sell early.
How long it takes to save
With $15,000 saved, adding $1,000 a month to a savings account earning 4%:
- 5% down ($32,000 cash): about 1 year 4 months
- 10% down ($52,000): about 2 years 10 months
- 20% down ($92,000): about 5 years 6 months
Meanwhile, home prices and rents may rise, so waiting has a cost too. A smaller down payment with PMI that you cancel later can come out ahead, especially when prices are climbing; see What Is PMI and How Do You Get Rid of It?
Low down payment options
- Conventional loans allow as little as 3% down for some buyers, with PMI below 20%.
- FHA loans allow 3.5% down, with their own mortgage insurance.
- VA and USDA loans can require no down payment for eligible borrowers.
Whatever you put down, keep an emergency fund. Emptying your savings for a bigger down payment leaves you exposed to repairs and surprises in your first year.
How to use the Down Payment Calculator
- Open the Down Payment Calculator.
- Enter the home price, the down payment percentage and the closing costs as a percentage of the price.
- Enter what you've saved so far, how much you save each month and the interest your savings earn.
- Enter the mortgage rate, the loan term and the PMI rate.
- Read the results: the cash you need, the down payment, the closing costs, the monthly payment and the time to save, with a chart of your savings toward the goal, the monthly payment at each down payment and a table of options from 3% to 25%.
Frequently asked questions
Do you need 20% down to buy a house?
No. Conventional loans allow as little as 3% down and FHA loans 3.5%, but below 20% you'll usually pay mortgage insurance.
How much cash do I need to buy a $400,000 house?
With 20% down and 3% closing costs, about $92,000. With 5% down, about $32,000.
Is it better to put more money down?
It lowers your payment and avoids PMI, but it takes longer to save and ties up cash. Either way, keep an emergency fund.