Key takeaways
- The median down payment for all U.S. homebuyers in 2025 was 19%, but first-time buyers put down a median of just 10%, and loan programs like VA and USDA allow zero down payment for eligible borrowers.
- On a $400,000 home at 7% interest, putting 5% down instead of 20% adds roughly $526 per month to your total housing payment (including private mortgage insurance or PMI) and costs approximately $83,700 more in total interest over 30 years.
- Gift money, 401(k) loans and state or local down payment assistance programs can all help fund a down payment, but each comes with specific lender rules, documentation requirements and potential trade-offs that buyers should discuss with their loan officer before closing.
A down payment on a house is the upfront portion of the purchase price you pay at closing. Your mortgage covers the rest. The amount you need depends on the type of loan, your credit profile and how much you have saved.
For many buyers, the down payment feels like the biggest barrier to homeownership. According to Bankrate's Home Affordability Report, 81% of aspiring homeowners say the down payment and closing costs are a significant obstacle. The actual minimums are often lower than the commonly cited 20% figure.
Do you have to put 20% down on a house?
No. A common misconception is that 20% is the standard down payment on a house. That's not the case, according to Melissa Cohn, regional vice president at William Raveis Mortgage.
The numbers confirm it. According to the National Association of Realtors (NAR), the median down payment for all U.S. homebuyers in 2025 was 19%, or about $78,831 on a median sale price of $414,900. But that figure is pulled upward by repeat buyers, who put down a median of 23%. First-time buyers put down a median of just 10%.
Age plays a role, too. NAR data shows buyers ages 26 to 34 put down a median of 10%, while buyers ages 70 to 78 put down 36%. Older buyers are more likely to have proceeds from a previous home sale or decades of savings to draw from.
First-time buyers generally have access to the lowest down payment minimums, but programs exist for repeat buyers as well. Many conventional loans allow as little as 3% to 5% down, and government-backed loans go even lower.
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How much is a down payment on a house by loan type?
The minimum down payment depends on your loan program. Here is how the most common mortgage types compare for primary residences:
| Loan type | Min. down payment | Min. credit score | Mortgage insurance |
| Conventional | 3% (first-time*) / 5% (other) | 620 | PMI required below 20% equity; removable once you reach 20% |
| FHA | 3.5% (580+ credit) / 10% (500–579) | 500 | Upfront mortgage insurance premium (MIP) of 1.75% + annual MIP (0.15%–0.75%); lasts life of loan with <10% down; drops off after 11 years with 10%+ down |
| VA | 0% | Varies (lenders typically prefer 620+) | None; one-time funding fee (1.25%–3.3%) |
| USDA | 0% | Varies (lenders typically prefer 640+) | Upfront guarantee fee of 1% + annual fee of 0.35% |
| Jumbo | Typically 10%+ | Varies (often 700+) | Varies by lender |
Sources: FHA, VA, USDA
*First-time buyer is generally defined as someone who has not owned a home in the past three years.
These minimums apply to primary residences. Second homes typically require at least 10% down on a conventional loan, and investment properties require 15% to 25%. VA and USDA loans cannot be used for second homes or investment properties.
One more threshold to be aware of: In 2026, the conforming loan limit is $832,750 in most markets. Homes priced above that amount require a jumbo loan, which generally means a larger down payment and stricter credit requirements.
The right loan type depends on your eligibility, credit history and how long you plan to stay in the home. Buyers considering an FHA loan should weigh the lower entry point against the cost of mortgage insurance that lasts the life of the loan. Those in eligible rural or suburban areas may want to explore a USDA loan, which requires no down payment at all.
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How does a smaller down payment affect your monthly costs?
A smaller down payment raises your monthly costs in two ways: a larger loan balance and, in most cases, mortgage insurance.
The loan math is straightforward. On a $400,000 home, putting 5% down means borrowing $380,000. Putting 20% down means borrowing $320,000. That $60,000 difference adds to your monthly payment and to the total interest you pay over the life of the loan.
The second cost is private mortgage insurance, or PMI. PMI protects the lender, not you, if you stop making payments. It's required on conventional loans when your down payment is below 20%.
"Depending on your credit score, mortgage insurance can be very expensive," Cohn said.
As Bankrate has reported, "Today, the average cost of private mortgage insurance is about 0.4 percent of the amount of the loan. If you were paying PMI on a $400,000 loan, for example, your premium would be $1,600 a year, or about $133 a month."
That 0.4% figure is an average. PMI rates can range from 0.3% to 2.0% of the loan balance per year, depending on your credit score and the size of your down payment. Most borrowers with decent credit pay well under 1%.
Your lender determines PMI using your loan-to-value ratio, or LTV. LTV is your loan amount divided by the home's value. A down payment below 20% means an LTV above 80%, which is the threshold that triggers PMI on conventional loans.
A higher down payment can also result in a lower interest rate. Because the lender is taking on less risk with a lower LTV, they may offer more favorable pricing.
Some buyers use what's called a piggyback mortgage to avoid PMI without putting 20% down. In this setup, you take out a primary mortgage for 80% of the home's value and a second, smaller loan for the remaining amount above your down payment. This strategy has trade-offs, including two sets of loan terms and potentially higher combined interest, so it's not the right fit for everyone.
Here is how different down payment amounts affect your monthly payment and total cost on a $400,000 home: Hypothetical monthly payments on a $400,000 home (30-year fixed, 7% interest rate). PMI estimated at 0.4% of the loan amount per year. Actual costs will vary.
| Down payment % | Down payment $ | Loan amount | Est. monthly P&I | Est. PMI/mo | Est. total monthly | Total interest paid |
| 5% | $20,000 | $380,000 | $2,528 | $127 | $2,655 | $530,054 |
| 10% | $40,000 | $360,000 | $2,395 | $120 | $2,515 | $502,156 |
| 15% | $60,000 | $340,000 | $2,262 | $113 | $2,375 | $474,258 |
| 20% | $80,000 | $320,000 | $2,129 | $0 | $2,129 | $446,360 |
PMI doesn't last forever. On a conventional loan, you can have it removed once you reach 20% equity. But as the table shows, even without PMI, a smaller down payment costs significantly more in total interest over 30 years. Remember that closing costs are separate from the down payment and typically add 2% to 5% of the home price at settlement.
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What is the difference between a down payment and earnest money?
Earnest money is a deposit you make when the seller accepts your offer. It typically ranges from 1% to 3% of the purchase price and is held in an escrow account until closing. Its purpose is to show the seller you're serious about the transaction.
The down payment is separate. It's the full upfront amount you pay at closing toward the purchase price. However, earnest money is usually applied toward the down payment or closing costs at settlement, so the two are connected.
If the deal falls through, whether you get your earnest money back depends on the contingencies in your purchase contract. Common contingencies that protect your deposit include financing, appraisal and home inspection clauses. Understanding the difference helps you budget accurately for the total cash you will need at closing.
Can you use gift money for a down payment?
Yes, but lender rules apply. According to Jennifer Beeston, a mortgage originator at lender Rate, some loan programs allow gifts only from certain people, such as a family member or spouse. The source of the gift must be someone your lender approves.
The money must also be a true gift with no repayment obligation. "If your mom gives you $20,000 for a down payment, but you have to pay her back within five years, that's a loan, so it can't be used as a down payment," Beeston said.
Documentation matters, too. "Every single lender is going to require a gift letter if someone's giving you funds during the transaction," she said. "So just be aware and make sure you're talking about it with your lender so you don't end up with some big deposit in your account that we can't use."
Timing affects how much paperwork is needed. If, for example, guests at your wedding two years ago crowdfunded for a down payment as a gift, you probably won't need additional documentation because those funds have been sitting in your account long enough to be considered "seasoned" (a lender term meaning the funds have had enough time in your account to establish a clear paper trail).
The general rule, according to Beeston: Anytime you are receiving a gift during your mortgage transaction, be upfront and transparent with your lender from the start.
Are there programs that help with a down payment?
Yes. Many cities, counties and states offer down payment assistance through grants, forgivable loans and deferred-payment loans. These programs are typically aimed at first-time buyers or low- to moderate-income households, though some are open to repeat buyers. Eligibility, funding amounts and repayment terms vary widely by location.
According to Beeston, down payment assistance programs operate on a "hyperlocal" level. She recommends talking to your loan officer about what's available in your area, because programs differ from one county to the next.
She also offers a word of caution. "One thing to watch out for is sometimes there'll be programs that aren't that great where you'll end up with a higher interest rate or higher fees," Beeston said. Always compare the total cost of a loan with assistance against one without it.
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How do you choose the right down payment for your budget?
The right down payment balances what you can afford upfront against what you can manage each month, with enough left over for unexpected costs.
"Don't put all your cash into it... especially if there are repairs you think you may need to do," said Lauren Lindsay, a financial adviser in Houston. "There's also furniture you didn't know you needed and things like that. So don't wipe out your emergency fund."
Lindsay suggests keeping your monthly housing payment at about 25% or less of your take-home pay. If a larger down payment pushes your savings too thin, a smaller one with slightly higher monthly costs may be the better choice.
She also encourages buyers to look honestly at their spending. "What is more important? Is homeownership more important than the things you're doing that you have control over?" Lindsay said. In some cases, adjusting current spending habits can free up enough room in the budget to cover the mortgage payment.
One practical detail: The down payment is paid at closing, typically via wire transfer or cashier's check. Lenders generally do not accept personal checks or cash.
When you're ready to start looking, you can search homes for sale on Homes.com.
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This updated article was originally reported by Moira Ritter.