Down payments usually range from 3% to 20% of the home's purchase price, depending on the loan type and your financial situation

A down payment is the money you give the seller upfront when you buy a house. The rest of the purchase price comes from a loan (called a mortgage) that you repay over time. The percentage you pay upfront affects how much you borrow, how much interest you pay over the life of the loan, and whether you need to pay extra insurance.

The actual dollar amount depends entirely on the home's price. On a $300,000 house, a 10% down payment is $30,000. On a $150,000 house, 10% is $15,000. There is no single "usual" amount in dollars — it varies by region, by home price, and by what you can afford to save.

The percentage you put down, though, follows patterns based on the type of loan you use. Understanding these patterns helps you figure out what is realistic for your situation.

Key Takeaways

  • Down payments range from 3% to 20% depending on your loan type, with conventional loans typically requiring 10% to 20% and government-backed loans allowing as little as 3% to 5%.
  • A smaller down payment means a larger monthly mortgage payment and additional costs like private mortgage insurance, which protects the lender if you stop paying.
  • The down payment amount is calculated as a percentage of the home's purchase price, so the dollar amount changes with the home you choose.
  • Saving for a down payment takes time, and many first-time buyers use a combination of personal savings, gifts from family, and sometimes down payment information programs.

The three main loan types and their down payment ranges

Conventional loans (the most common type, offered by banks and private lenders) typically require 10% to 20% down. Some lenders will go as low as 5%, but this is less common. A 20% down payment is the traditional benchmark because it eliminates the need for mortgage insurance and often qualifies you for better interest rates.

FHA loans (backed by the Federal Housing Administration, a government agency) allow down payments as low as 3.5%. These loans are designed for first-time buyers and people with lower credit scores. The tradeoff is that you pay mortgage insurance for the life of the loan, which adds to your monthly cost.

VA loans (for military members, veterans, and surviving spouses) and USDA loans (for rural properties) can require 0% down. These are specialized programs with their own rules about who qualifies and where the property can be located.

What happens when you put down less than 20%

If you borrow more than 80% of the home's value, lenders require you to pay private mortgage insurance (PMI). This is insurance that protects the lender, not you. It costs between 0.5% and 1.5% of your loan amount per year, added to your monthly mortgage payment.

On a $300,000 home with a 10% down payment ($30,000), you borrow $270,000. PMI might add $100 to $400 per month to your payment, depending on the exact loan amount and your credit score. This continues until you have paid down the loan enough that you own at least 20% of the home's value.

A smaller down payment also means a larger monthly mortgage payment overall, because you are borrowing more. The tradeoff is that you need less cash upfront. For many people, especially first-time buyers, this is worth the extra monthly cost.

How to figure out what you can actually save

Start by looking at homes in your area and their typical prices. Then calculate 3%, 5%, 10%, and 20% of that number. This gives you concrete dollar targets to save toward.

If the 20% number feels impossible, that is normal — most first-time buyers do not put down 20%. Many put down 5% to 10% and accept the PMI cost. Others save for a few years to reach 10% or 15%. There is no single right answer; it depends on how long you are willing to wait and how much monthly payment you can afford.

Some people also receive down payment help from family members (called a gift), or they use down payment information programs offered by nonprofits, local governments, or employers. These do not have to be repaid like a loan.

The real cost of a smaller down payment over time

Putting down 5% instead of 20% on a $300,000 home means borrowing an extra $45,000. Over a 30-year mortgage at typical interest rates, that extra borrowing costs you tens of thousands of dollars in additional interest and PMI combined.

However, if waiting five years to save the extra $45,000 means you miss out on a home you want, or if home prices in your area are rising faster than you can save, a smaller down payment may make sense for your situation. The math is not the only factor — timing and your personal circumstances matter too.

What lenders look at besides your down payment

The amount you put down is only one part of a mortgage decision. Lenders also examine your credit score (a number based on your borrowing and payment history), your income, your existing debts, and your employment history. A larger down payment can sometimes offset a lower credit score, but it does not may provide approval.

Your debt-to-income ratio — the percentage of your monthly income that goes to debt payments — also matters. Most lenders want this to be below 43%, meaning your total monthly debts (including the new mortgage) should not exceed 43% of your gross monthly income.

Frequently Asked Questions

Can I borrow the down payment from someone else?

You can receive a gift from a family member, and most lenders allow this. You typically cannot borrow the down payment as a loan, because that increases your debt and changes your debt-to-income ratio. The lender will ask you to document that the money is a gift, not a loan.

What if I only have 2% saved?

Some FHA lenders will work with 3% down, which is the lowest conventional option. If you have less than 3%, you would need to save more, explore down payment information programs in your area, or wait until you can reach that threshold. A local housing counselor can discuss your specific options.

Does a larger down payment always mean a better interest rate?

Usually, yes — a 20% down payment often qualifies you for a lower interest rate than a 5% down payment. However, interest rates also depend on your credit score, the loan type, and current market conditions. It is worth getting quotes from multiple lenders to compare.

When can I stop paying mortgage insurance?

With an FHA loan, you typically pay mortgage insurance for the life of the loan. With a conventional loan, you can request to remove PMI once you have paid the loan down to 80% of the home's original value, though some lenders remove it automatically at that point.

Is there a down payment information program in my area?

Many cities and states offer down payment information through nonprofits, housing authorities, or employer programs. Your local housing authority or a 211 referral can tell you what is available where you live. These programs vary widely in what they cover and who qualifies.