How down payments affect your mortgage
Your down payment is the part of the price you pay in cash. The rest is your loan. A larger down payment shrinks the loan, lowers the monthly payment and the total interest, and at 20% or more removes PMI on a conventional loan. For example, on a $350,000 home at 6.5%, putting 20% down instead of 5% cuts the loan by $52,500 and the monthly principal and interest by about $330, before counting PMI.
Minimum down payment by loan type
| Loan type | Minimum down | Notes |
|---|
| Conventional | 3% to 5% | PMI below 20%; can be removed later |
| FHA | 3.5% | With a 580+ credit score; mortgage insurance usually for the life of the loan with less than 10% down |
| VA | 0% | For eligible service members, veterans and some spouses; funding fee instead of PMI |
| USDA | 0% | For eligible rural and suburban areas and incomes |
| Jumbo | 10% to 20% | For loans above conforming limits |
Tips to save faster
- Keep down payment savings in a high-yield savings account or CDs, not the stock market, if you plan to buy within a few years.
- Automate a transfer right after each payday.
- Check state and local down payment assistance programs for first-time buyers.
Next steps: estimate the whole payment with the mortgage calculator, budget for closing costs, and see the home affordability calculator.
Last reviewed October 2026.
Frequently asked questions
How much should I put down on a house?
Twenty percent is the classic target because it avoids private mortgage insurance (PMI) on a conventional loan. But many buyers put down much less: conventional loans allow 3% to 5%, FHA loans 3.5%, and VA and USDA loans 0%. A smaller down payment means a bigger loan, a higher monthly payment and usually PMI.
What is PMI and when does it go away?
Private mortgage insurance protects the lender when you put down less than 20% on a conventional loan. It often costs about 0.3% to 1.5% of the loan per year. You can ask to cancel it once you reach 20% equity, and it ends automatically at 22% equity based on the original schedule.
What is the minimum down payment?
It depends on the loan: 3% for some conventional loans (like Fannie Mae HomeReady and Freddie Mac Home Possible), 3.5% for FHA with a credit score of 580 or higher, and 0% for VA loans (eligible service members and veterans) and USDA loans (eligible rural areas).
Should I put more down or keep cash?
A bigger down payment lowers your payment and interest, but keep an emergency fund and money for closing costs (often 2% to 5% of the price), moving and repairs. Being house-rich and cash-poor is risky.
Can gift money be used for a down payment?
Usually, yes. Most loan programs allow gifts from family, with a signed gift letter stating the money does not need to be repaid. Rules vary by loan type, so ask your lender early.