How Much Down Payment Do You Need for a House?

Less than most people think. While 20% down avoids PMI, many loans allow far less: conventional loans from 3%, FHA loans from 3.5%, and VA and USDA loans from 0% for those who qualify. On a $350,000 home, 3% is $10,500, 5% is $17,500, and 20% is $70,000. Lower down payments mean a bigger loan and usually PMI.

No — that's a common myth. 20% down lets you avoid private mortgage insurance (PMI), but plenty of buyers put down 3–5%. You'll pay PMI until you reach 20% equity, and your loan and monthly payment will be larger, but you can absolutely buy with less than 20% down.

PMI (private mortgage insurance) is required on conventional loans when you put down less than 20%. It typically costs about 0.3%–1.5% of the loan per year, added to your monthly payment — often $100–$300 a month. Once you reach 20% equity, you can usually request to cancel it.

A bigger down payment lowers your loan, monthly payment, and total interest, and removes PMI at 20%. But putting down everything you have can leave you cash-poor. Many buyers balance a solid down payment with keeping an emergency fund and money for closing costs and moving.

Conventional loans start at 3% down (with PMI), FHA loans at 3.5% (with mortgage insurance), and VA loans (eligible veterans/service members) and USDA loans (eligible rural buyers) can be 0% down. Each has its own requirements, so the best option depends on your situation.

Closing costs, typically 2–5% of the loan, plus moving expenses and a cushion for repairs. On a $350,000 purchase, closing costs alone can run $7,000–$17,500. Budget for these on top of your down payment so you're not stretched thin the day you move in.