How Much Down Payment for a House in 2026?
"You need 20% down to buy a house." If you believed that, you'd need $70,000 to buy a $350,000 home — and most Americans would wait years longer than necessary. The reality? The median first-time buyer puts down just 6–8%, and several loan programs let you buy with 3.5% or even 0% down.
Here's what you actually need — and what it costs.
Run the numbers for any down payment amount with the Mortgage Calculator→Down Payment Requirements by Loan Type
| Loan Program | Minimum Down | Credit Score | PMI/MIP? | Best For |
|---|---|---|---|---|
| Conventional | 3–5% | 620+ (3% needs 680+) | Yes, until 20% equity | Buyers with good credit |
| FHA | 3.5% | 580+ | Yes (life of loan under 10%) | Lower credit, smaller savings |
| VA | 0% | No minimum (lenders use 620+) | No PMI | Veterans, active military |
| USDA | 0% | 640+ | Guarantee fee | Rural/suburban areas |
| Conventional 20% | 20% | 620+ | No PMI | Buyers with large savings |
The "right" down payment depends on your financial situation, not a rule of thumb. Each option has trade-offs.
What 3.5%, 5%, 10%, and 20% Actually Look Like
On a $350,000 home with a 6.5% mortgage rate, 30-year fixed:
| Down Payment | Cash Down | Loan Amount | Monthly P&I | PMI/MIP | Total Monthly | Total Cash Needed* |
|---|---|---|---|---|---|---|
| 3.5% (FHA) | $12,250 | $337,750 | $2,135 | ~$236 | $2,371 | $22,750 |
| 5% | $17,500 | $332,500 | $2,102 | ~$166 | $2,268 | $28,000 |
| 10% | $35,000 | $315,000 | $1,991 | ~$131 | $2,122 | $45,500 |
| 20% | $70,000 | $280,000 | $1,770 | $0 | $1,770 | $80,500 |
*Total cash = down payment + estimated 3% closing costs. Does not include reserves.
The difference between 3.5% and 20% down: $57,750 more in upfront cash, but only $601 less per month. If it takes you 5 years to save that extra $57,750, home prices may rise by more than you saved.
Use the Down Payment Calculator to model your specific scenario.
The PMI Question: Is 20% Down Worth It?
Private Mortgage Insurance (PMI) is required on conventional loans when you put down less than 20%. It protects the lender (not you) if you default.
What PMI costs
- Typically 0.5–1.5% of the loan amount per year
- On a $332,500 loan: $138–$416/month
- Your exact rate depends on credit score, down payment %, and loan-to-value
PMI isn't forever
Conventional PMI automatically drops off when your loan balance reaches 78% of the original purchase price (or you can request removal at 80%). On a 30-year loan with 5% down, that's typically 7–9 years.
FHA MIP is different
FHA mortgage insurance premium (MIP) stays for the life of the loan if you put down less than 10%. With 10%+ down, MIP drops after 11 years. The only way to remove FHA MIP with less than 10% down is to refinance into a conventional loan once you have 20% equity.
The real comparison
PMI adds $150–$250/month for most borrowers. Over the 7–9 years until it drops off, that's $12,600–$27,000. Compare that to the opportunity cost of keeping an extra $50,000+ tied up in a down payment instead of invested. At 7% average returns, $50,000 invested for 8 years grows to roughly $86,000 — a $36,000 gain that outweighs the PMI cost.
Don't Forget Closing Costs
The down payment isn't the only cash you need at the closing table. Closing costs typically run 2–5% of the home price and include:
| Cost | Typical Range |
|---|---|
| Loan origination fee | 0.5–1% of loan |
| Appraisal | $400–$700 |
| Home inspection | $300–$500 |
| Title insurance | $1,000–$3,000 |
| Attorney fees | $500–$2,000 (required in some states) |
| Prepaid taxes & insurance | 2–6 months |
| Recording fees | $100–$500 |
On a $350,000 home, expect $7,000–$17,500 in closing costs on top of your down payment. Some of these are negotiable, and seller concessions (where the seller pays part of your closing costs) are common in buyer-friendly markets.
Get a detailed breakdown with the Closing Cost Calculator.
Down Payment Assistance Programs — Free Money Exists
Over 2,000 down payment assistance (DPA) programs operate across the US. They offer grants, forgivable loans, or matched savings to help buyers — and they're not just for low-income households.
Types of DPA
- Grants: Free money that doesn't need to be repaid. Some state programs offer $5,000–$15,000.
- Forgivable loans: A second lien that's forgiven after 5–10 years if you stay in the home.
- Deferred-payment loans: No payments required until you sell, refinance, or pay off the first mortgage.
- Matched savings (IDA): Save $X and the program matches it 2:1 or 3:1.
Where to find programs
- Your state housing finance agency (every state has one)
- HUD's list of local homebuying programs
- Your city or county government
- Your employer (some companies offer homebuying benefits)
Many programs have income limits of 80–120% of area median income, which covers a surprisingly wide range of earners in most markets.
Gift Money Rules
Family members can gift money for your down payment, but documentation matters:
- Conventional loans: Gift allowed from family members, fiancé/fiancée, or domestic partner. A signed gift letter required stating no repayment expected.
- FHA loans: Similar rules, but gifts can also come from employers, labor unions, charitable organizations, and close friends with a documented relationship.
- VA loans: Gifts allowed from anyone.
The IRS gift tax exclusion is $18,000 per person per year (2026). A couple can give $36,000 to a single recipient without filing a gift tax return. Amounts above that reduce the giver's lifetime exemption but typically don't result in actual tax owed.
How Long Will It Take to Save?
Saving a down payment is the biggest hurdle for most buyers. The timeline depends on three variables: target amount, monthly savings, and investment return.
| Target | Monthly Savings | Time (at 4.5% APY) |
|---|---|---|
| $12,250 (3.5% on $350K) | $500 | 23 months |
| $12,250 | $1,000 | 12 months |
| $17,500 (5% on $350K) | $500 | 32 months |
| $17,500 | $1,000 | 17 months |
| $70,000 (20% on $350K) | $1,000 | 58 months |
| $70,000 | $2,000 | 31 months |
Park your down payment savings in a high-yield savings account earning 4–5% APY. It's FDIC-insured, liquid, and earns more than enough to offset inflation. Don't invest your down payment fund in stocks if you plan to buy within 2–3 years — a market drop at the wrong time could delay your purchase.
Model your exact timeline with the Down Payment Calculator.
Should You Wait for 20% or Buy Now?
This is one of the most debated questions in personal finance. Consider:
Buy now with less than 20% if:
- Home prices in your area are rising faster than you can save
- Your rent payment is comparable to a mortgage + PMI
- You plan to stay at least 5 years
- You have a stable income and emergency fund
Wait for 20% if:
- You're in a flat or declining market
- You'd wipe out your emergency fund to close
- Your DTI would be uncomfortably high
- You expect a significant income increase soon
In most appreciating markets, buying sooner with a smaller down payment and paying PMI for a few years beats waiting — because the home equity you build offsets the PMI cost.
Check your borrowing power with the Home Affordability Calculator and your debt load with the DTI Calculator.
Bottom Line
You don't need 20% to buy a house — most first-time buyers put down far less. The minimum ranges from 0% (VA/USDA) to 3.5% (FHA) to 5% (conventional). Factor in closing costs of 2–5%, keep an emergency fund intact, and you'll have a realistic target. Spring buying season is approaching — start running the numbers now so you're ready when inventory picks up.
Frequently Asked Questions
What is the minimum down payment for a house?
FHA loans: 3.5% (with 580+ credit score). Conventional loans: 3-5%. VA loans: 0% for eligible veterans. USDA loans: 0% in eligible rural areas. On a $350,000 home, that ranges from $0 (VA/USDA) to $12,250 (FHA) to $17,500 (5% conventional). The "20% rule" is outdated — most first-time buyers put down far less. See DTI Needed for Mortgage for qualifying with different down payment amounts.
How much does PMI cost if I put less than 20% down?
PMI typically costs 0.3-1.5% of the loan amount annually, depending on credit score and down payment size. On a $300,000 loan, that's $75-$375/month. PMI automatically drops off when you reach 20% equity (based on the original purchase price). Some lenders offer lender-paid PMI at a slightly higher rate. See How Long to Save for a Down Payment for saving timelines.
Is it better to put 20% down or invest the difference?
Putting 20% down avoids PMI ($100-$300/month savings) and gives you a lower monthly payment. Investing the difference in a diversified portfolio historically earns 7-10% — potentially outpacing the 0.5-1% PMI cost plus the 6-7% mortgage rate. There's no universal answer; risk tolerance and cash reserves matter. See Down Payment Assistance 2026 for free money programs.
This article is for informational purposes only and does not constitute financial advice. Consult a qualified financial advisor for guidance tailored to your personal circumstances.
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