{"id":4590,"date":"2016-04-28T07:54:08","date_gmt":"2016-04-28T07:54:08","guid":{"rendered":"https:\/\/www.movoto.com\/foundation\/?p=4590"},"modified":"2026-10-23T10:11:53","modified_gmt":"2026-10-23T17:11:53","slug":"down-payment-on-a-house-what-is-the-ideal-amount-to-put-down","status":"publish","type":"post","link":"https:\/\/www.movoto.com\/blog\/down-payment-on-a-house-what-is-the-ideal-amount-to-put-down\/","title":{"rendered":"How Much Should You Put Down on a House"},"content":{"rendered":"

You do not need a 20% down payment to buy a house.<\/p>\n

Some conventional mortgages allow as little as 3% down, FHA loans can start at 3.5%, and eligible VA and USDA borrowers may be able to buy with no down payment at all.<\/p>\n

The better question is how much you should put down. A larger down payment reduces the amount you borrow and can lower your monthly payment, but putting too much cash into the house can leave you short on savings after closing.<\/p>\n

Key Takeaways<\/h2>\n
    \n
  1. You do not need 20% down for most mortgages, and some programs require little or nothing down.<\/li>\n
  2. A larger down payment lowers your loan balance and can reduce or eliminate conventional PMI.<\/li>\n
  3. The right amount balances monthly housing costs with the cash you want to keep after closing.<\/li>\n<\/ol>\n

    What do different down payments look like?<\/h2>\n

    Consider a $400,000 home financed with a 30-year fixed-rate mortgage at 7.03%, Freddie Mac’s national average for the week ending Sept. 24, 2026.<\/p>\n

    The examples below use the same interest rate at every down payment level to isolate the effect of borrowing less. Actual mortgage pricing can change with loan-to-value ratio, credit score and other factors.<\/p>\n\n\n\n\n\n\n\n\n\n
    Down payment<\/th>\nCash down<\/th>\nLoan amount<\/th>\nPrincipal & interest<\/th>\nIllustrative PMI<\/th>\n30-year interest<\/th>\n<\/tr>\n<\/thead>\n
    3%<\/td>\n$12,000<\/td>\n$388,000<\/td>\n$2,589<\/td>\n$162\/month<\/td>\n$544,110<\/td>\n<\/tr>\n
    5%<\/td>\n$20,000<\/td>\n$380,000<\/td>\n$2,536<\/td>\n$158\/month<\/td>\n$532,892<\/td>\n<\/tr>\n
    10%<\/td>\n$40,000<\/td>\n$360,000<\/td>\n$2,402<\/td>\n$150\/month<\/td>\n$504,845<\/td>\n<\/tr>\n
    15%<\/td>\n$60,000<\/td>\n$340,000<\/td>\n$2,269<\/td>\n$142\/month<\/td>\n$476,798<\/td>\n<\/tr>\n
    20%<\/td>\n$80,000<\/td>\n$320,000<\/td>\n$2,135<\/td>\n$0<\/td>\n$448,751<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    Principal and interest figures assume the loan remains outstanding for the full 30-year term. Taxes, homeowners insurance, HOA dues and other costs are not included. PMI is an illustrative estimate using an annual cost of 0.5% of the original loan amount and is not a quote; actual PMI varies substantially by borrower and loan.<\/p>\n

    The table shows the trade-off clearly. Moving from 5% down to 20% down requires another $60,000 upfront, but it reduces the mortgage balance by $60,000, lowers principal and interest by roughly $401 per month and removes the illustrative PMI charge.<\/p>\n

    Do you need 20% down to buy a house?<\/h2>\n

    No. The idea that buyers generally need 20% down is outdated.<\/p>\n

    Certain conventional loans allow financing up to 97% of a home’s value, which corresponds to a 3% down payment. FHA financing can require as little as 3.5% down for borrowers meeting the applicable credit requirements.<\/p>\n

    VA and USDA financing can go even further by allowing eligible borrowers to buy with no required down payment.<\/p>\n

    The exact down payment requirements for different loan types<\/a> vary based on the mortgage program, occupancy, property and borrower qualifications.<\/p>\n

    Why does everyone talk about 20% down?<\/h2>\n

    Twenty percent still matters, particularly for conventional financing.<\/p>\n

    If you put 20% down on a conventional mortgage, your starting loan-to-value ratio is 80%. Borrower-paid private mortgage insurance generally is not required at that level.<\/p>\n

    With less than 20% down, conventional borrowers commonly pay PMI until they meet applicable cancellation or termination requirements.<\/p>\n

    That makes 20% an important cost threshold, but not a universal qualification requirement.<\/p>\n

    It also does not work the same way with every mortgage. FHA loans use FHA mortgage insurance rather than conventional PMI, while VA loans do not require monthly mortgage insurance and USDA loans use guarantee fees.<\/p>\n

    What are the benefits of putting more money down?<\/h2>\n

    The first benefit is straightforward: you borrow less.<\/p>\n

    On a $400,000 home, putting 10% down means borrowing $360,000. Putting 20% down means borrowing $320,000. That $40,000 difference reduces the amount on which interest accrues.<\/p>\n

    A larger down payment can also:<\/p>\n