If you’re considering buying your first home, then you’re likely trying to determine how much house you can afford – and how much down payment you need. While a 20% down payment is often considered standard, that’s not always the case. Homeownership may be easier to achieve than you think.
In this Redfin article, we’ll tell you how much you really need for a down payment on a house, whether you’re looking to buy a home in Austin, TX, or a condo in San Jose, CA. From low down payment home loans to down payment assistance programs, there are plenty of factors that help determine how much to put down on a house.
Key takeaways
You don’t need a 20% down payment, depending on your loan type.
Some loans don’t require a down payment.
You can still get a conventional loan without paying 20% down, but you’ll need private mortgage insurance (PMI).
If you have a larger down payment, you may be able to get a lower interest rate.
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The short answer is, it depends. There are various factors that influence how much to put down on a house, like your long-term goals, finances, and the type of mortgage loan you get. While a 20% down payment is often preferred by lenders, it’s not necessarily “standard.”
There are several loan programs that only require you to put down 3.5 or 5 percent of a home’s purchase price – there are even a few that require nothing down. You can also buy a home without a 20 percent down payment by paying for private mortgage insurance, or PMI.
What is PMI?
PMI stands for private mortgage insurance. PMI is a type of insurance that protects your lender if you were to default on the loan. If you have a down payment that’s less than 20%, then you’ll need to pay for PMI. Keep in mind that this insurance doesn’t cover you, but protects your mortgage lender.
PMI doesn’t last the duration of your mortgage. Once you reach 20% equity in your home, you can ask your lender to remove PMI. However, PMI is often automatically removed once you’ve reached 22% equity in your home.
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Depending on the mortgage loan you plan to apply for, the minimum down payment will vary. Let’s look at the minimum down payment requirements.
Loan type
Minimum down payment
Conventional
3%
FHA
3.5% with a credit score at least 580
10% with a credit score of (500-579)
Jumbo
5-10%, but varies
USDA
0%
VA
0%
Second homes or investment properties
10%, but varies
Conventional loan – as low as 3% down
Down payment requirements for conventional loans can vary depending on the borrower, lender, and property type. Therefore, some lenders may only offer mortgages with a down payment as low as 5%. Be sure to speak with a few lenders to find the right loan for you. It’s important to remember that a down payment below 20% means you’ll need to pay PMI.
FHA loans – as low as 3.5% down
Federal Housing Administration (FHA) loans offer down payments as low as 3.5% as long as you have a credit score of at least 580. If your credit score is between 500 and 579, FHA loans require a down payment of 10%.
With FHA loans you’ll need to pay mortgage insurance premiums (MIP). This insurance breaks down into two costs – an upfront MIP paid at closing (usually 1.75% of the loan amount) and an annual MIP which is added to your mortgage payment. The annual MIP cost depends on your loan terms, down payment, and loan amount.
Jumbo loans – as low as 5-10% but varies
A jumbo loan is a type of mortgage loan that exceeds the Federal Housing Finance Agency’s (FHFA) conforming loan limits. In 2025, conventional loans that exceed $806,500, or $1,209,750 in high cost of living areas, will likely need a jumbo loan. Due to the size of the loan, lenders often ask for a higher down payment. However, it can still be as low as 5-10%, but be sure to speak with your lender about their requirements.
VA and USDA loans – 0% down payment
Backed by the U.S. Department of Veterans Affairs (VA), VA loans typically do not require a down payment. Current and veteran military service members and qualifying surviving spouses are eligible to receive VA loans.
USDA loans are backed by the U.S. Department of Agriculture (USDA) and offer no down payment loans. However, borrowers must purchase homes in designated rural or suburban areas. You may also need to meet income limits and additional requirements.
VA and USDA loans don’t require you to have mortgage insurance, however there are fees unique to each program. VA loans typically have a funding fee which can range from 1.25-3.3%. It’s a one-time fee that varies depending on your down payment amount and other factors. USDA loans require an annual guarantee and an upfront fee. These fees are not dependent on your down payment amount.
Second homes or investment properties – 10%, but varies
When you buy a second home or an investment property with a conventional loan it’s likely you’ll have a higher down payment. If it’s a second home it may be as low as 10%, but if it’s an investment property, you may need 15-25% down. However, this number depends on many factors like your credit score, finances, and more.
How to calculate down payment
Calculating your down payment is simple, as the down payment is a percentage of the home’s price. For example, if you’re buying a home in Seattle for $700,000 and want to put 20 percent down, the down payment would be $140,000. If you wanted to only put 10 percent down, then your down payment would be $70,000.
You can also use a home affordability calculator to help you determine the right down payment for you and potential monthly mortgage payments.
How much to put down on a house
How much you decide to put down on a house is your decision. There are several factors to consider that can help you, such as your finances, credit score, and loan type. Let’s take a look at some of these factors:
Finances: Depending on the state of your finances, credit score, and outstanding loans, you’ll need to consider how much down payment you can afford. Your credit score may impact what loans you qualify for – and it may be worth it to spend time improving your credit score.
Long-term goals: Your long-term goals will also impact your down payment amount. Is building home equity a priority or do you want to invest that money elsewhere? Do you plan on staying in the home long-term or are you thinking about moving to a new city in a few years? Answering these questions can help you determine how much to put down on a house.
Emergency savings: It’s important to have – and keep – an emergency fund. You don’t want to pay a higher down payment if it means you’ll have to dip into your emergency savings.
Closing costs: No matter how much your down payment is, you’ll need to pay closing costs. Closing costs are fees and expenses, like inspection fees, appraisal costs, earnest money, and property taxes that are paid at closing. Usually, closing costs are 2-5% of the purchase price of the home.
Homeownership costs: There are ongoing costs associated with homeownership that may affect how much you should put down on a house. These costs typically include monthly HOA fees, homeowners insurance, any specialty insurance like fire or flood insurance, home maintenance, and emergency repairs.
Pros of a 20 percent down payment
Better mortgage interest rate: If you have a larger down payment, your mortgage lender may reduce the interest rate by a few fractions of a percentage point. A larger down payment often indicates less risk to lenders, so they may give you a better loan term.
Faster home equity: Putting down a larger down payment means you’ll own more of the home faster – meaning more equity in your home faster. The more equity you have, the more wealth you can build.
Lower monthly payments: The less money you borrow from your lender helps reduce the principal amount on the loan. This means your monthly mortgage payments will be lower.
Lower closing costs: Often the closing costs are calculated as part of your total loan value. If you borrow less, then your closing costs can be cheaper.
No PMI: When you put 20% or more down on a house, you won’t have to pay PMI.
More competitive offer: If it’s a sellers market and there are lots of buyers eager to purchase the home, having a higher down payment may make your offer more competitive. It can signal to sellers that your loan is more likely to close.
Pros of a smaller down payment
Helps you become a homeowner: One of the biggest benefits of choosing a lower down payment is that it gets you in the door to becoming a homeowner. As a homeowner, you can begin building equity.
Additional funds: Having a smaller down payment means you’ll have additional funds to cover closing costs and inspection costs.
Financial flexibility: If you don’t put down a larger down payment then you may have additional funds to invest elsewhere.
What down payment assistance programs are available?
If you’re a first time homebuyer there are plenty of down payment assistance programs that can help you purchase your first home. Down payment assistance options break down into three categories – loans, grants, and credits.
Loans are typically in the form of a second mortgage. They are often a deferred payment loan or may be partially or completely forgiven after living in the home for a certain number of years. Some programs offer 0% interest; however, this varies depending on the program.
Grants are usually forgiven after a certain amount of time that you’ve lived in the home. They typically cover closing costs. Credits, also known as mortgage credit certificates, reduce what you pay in federal taxes by lowering how much you pay in interest on your mortgage loan.
There are also down payment assistance programs even if you’re not a first time homebuyer. Speaking with your agent or lender can help you understand what programs are available in your area and what criteria you may qualify for.
So, how much down payment do you really need?
At the end of the day, the down payment you need to buy a home depends on your finances, goals, and loan type. Whether you can afford a 20 percent down payment or qualify for a 0 percent down payment home loan, you have options to become a homeowner.
If you are represented by an agent, this is not a solicitation of your business. This article is for informational purposes only, and is not a substitute for professional advice from a medical provider, licensed attorney, financial advisor, or tax professional. Consumers should independently verify any agency or service mentioned will meet their needs. Learn more about our
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Alison is part of the Content Marketing team as a Content Marketing Manager. In her 5 years at Redfin, Alison has written a variety of articles ranging from home design tips to housing affordability. A California-native, Alison currently resides in Seattle where you can find her catching a concert or exploring farmers’ markets. Her dream home is a cottage-style house with a chef’s kitchen and a cozy room to store and play vinyl records.
