The typical down payment is between 10 and 20 percent of the home's price
Most people putting down money on a house put down somewhere between 10 and 20 percent of what the house costs. If a house costs $300,000, that means a down payment between $30,000 and $60,000. The exact amount varies widely — some buyers put down 3 percent, others put down 30 or more — but 10 to 20 percent is where most fall.
The down payment is the money you bring to closing that reduces how much you need to borrow. The rest comes from a mortgage loan. The size of your down payment affects your monthly payment, how much interest you pay over time, and whether you have to pay an extra monthly fee called mortgage insurance.
Key Takeaways
- Down payments typically range from 10 to 20 percent of the home price, though some first-time buyer programs allow as little as 3 percent.
- If you put down less than 20 percent, you will pay mortgage insurance on top of your regular monthly payment until you reach 20 percent equity.
- A larger down payment lowers your monthly payment and the total interest you pay, but it also means saving more money before you buy.
- The down payment comes from your own savings — not from the loan — so you need to have this money available before closing day.
Why down payment size matters to your monthly payment
The down payment directly changes how much you borrow. If the house costs $300,000 and you put down $60,000, you borrow $240,000. If you put down $30,000, you borrow $270,000. A larger loan means a larger monthly payment, even at the same interest rate.
Over a 30-year loan, the difference adds up. Borrowing an extra $30,000 typically costs you roughly $150 to $180 more per month, depending on interest rates. That is $54,000 to $65,000 more over the life of the loan — money that goes to the lender, not to building your own equity.
This is why down payment size is one of the first things to think about. A bigger down payment means lower monthly costs and less total interest paid. The trade-off is that you need to save more money upfront before you can buy.
What happens when you put down less than 20 percent
If your down payment is less than 20 percent, the lender requires you to pay private mortgage insurance, or PMI. This is an extra monthly fee — usually between 0.5 and 1.5 percent of the loan amount per year — that protects the lender if you stop paying.
On a $270,000 loan, PMI might cost $100 to $300 per month. You pay it alongside your regular mortgage payment until you have paid down the loan enough that you own at least 20 percent of the home's value. This usually takes several years of payments.
Once you reach 20 percent equity, you can request that the lender remove PMI. Some loans remove it automatically; others require you to ask. Check your loan documents to see which applies to you. The point is that PMI is temporary — it ends — but it does cost real money while it lasts.
Down payment amounts for different types of buyers
First-time home buyers often have access to programs that allow smaller down payments. Federal Housing Administration (FHA) loans, for example, allow down payments as low as 3.5 percent. VA loans (for military members and veterans) often require no down payment at all. USDA loans (for rural properties) also frequently require zero down.
Conventional loans — the most common type — typically require at least 3 percent down, though many lenders prefer 5 to 10 percent. Jumbo loans (for expensive homes) often require 10 to 20 percent because the loan amount is so large.
The type of loan you may have access to for depends on your credit score, income, and whether you meet other requirements. A mortgage lender can tell you what down payment options are available to you based on your specific situation.
The difference between a smaller and larger down payment
| Down Payment | Amount Borrowed | Monthly Payment (approx.) | PMI Required? |
|---|---|---|---|
| 3% ($9,000) | $291,000 | $1,550 + PMI | Yes |
| 10% ($30,000) | $270,000 | $1,440 + PMI | Yes |
| 20% ($60,000) | $240,000 | $1,280 | No |
These are rough estimates for a $300,000 house at a 6.5 percent interest rate over 30 years. Your actual payment will depend on your interest rate, loan term, property taxes, homeowners insurance, and HOA fees if applicable. The key point is that each percentage point of down payment reduces your monthly cost and eliminates PMI once you reach 20 percent.
The table shows why people often aim for 20 percent: it is the threshold where PMI stops. Below that point, you are paying extra every month. At 20 percent and above, that extra cost disappears, which can free up $100 to $300 per month depending on your loan size.
How to decide what down payment makes sense for you
The right down payment depends on three things: how much you have saved, how soon you want to buy, and what your monthly budget allows. If you have $100,000 saved and the house costs $300,000, you could put down 33 percent. If you have $20,000 saved, you might put down 7 percent and pay PMI for a few years.
Some people prioritize buying sooner with a smaller down payment. Others save longer to put down 20 percent and avoid PMI entirely. Neither choice is wrong — it depends on your timeline and comfort with monthly costs. A mortgage lender can show you the actual numbers for your situation so you can compare.
One thing to keep in mind: your down payment comes from your own money, not from the loan. Make sure you have enough savings left over after closing to cover moving costs, repairs, and emergencies. Putting every dollar you have into the down payment can leave you house-poor and unable to handle unexpected expenses.
Frequently Asked Questions
Can I borrow money for my down payment?
Most lenders do not allow you to borrow the down payment from another lender, because it increases your debt-to-income ratio and makes the loan riskier. Some lenders allow a gift from a family member, but you typically have to document that it is a gift, not a loan. Ask your lender what their policy is before you commit to a down payment amount.
What if I can only put down 3 percent?
A 3 percent down payment is possible through FHA loans and some conventional programs, but you will pay PMI and have a higher monthly payment. This is a real option for people who want to buy sooner rather than wait to save more. Just make sure you understand the total monthly cost before you commit.
Does a bigger down payment help me get approved for a loan?
Yes. A larger down payment lowers the lender's risk, so it can help you get approved if your credit or income is borderline. It can also help you get a better interest rate. If you are on the edge of approval, putting down more money can make the difference.
What is the difference between down payment and closing costs?
The down payment is the money you put toward the purchase price. Closing costs are separate fees — for the appraisal, title search, inspection, and lender fees — that typically run 2 to 5 percent of the home price. You pay both at closing, so budget for both when you are saving.