A down payment is a standard requirement for most mortgage loans. The amount you’ll need depends on the type of loan you’re applying for and your financial situation and goals. Ideally, you’ll want to put down as much as you can comfortably afford to increase your approval odds, possibly avoid mortgage insurance and have a more affordable monthly mortgage payment.

How much is a down payment on a house?

You might have heard you’re required to put down 20 percent on a home. In truth, there’s no single figure or percentage for a home down payment; how much to put down on a house depends on the type of loan you get and the mortgage lender’s requirements, among other factors.

For a conventional loan, you might be able to put down as little as 3 percent. FHA loans require as little as 3.5 percent, and VA loans and USDA loans have no down payment requirement at all.

The catch, however: If you put less than 20 percent down on a conventional loan, you’ll be charged private mortgage insurance (PMI) premiums, which increase your monthly mortgage payment. You’ll be required to pay for a similar policy if you get an FHA loan, as well, known as mortgage insurance premiums (MIP).

This is why 20 percent is often cited as the gold standard: It’s the minimum stake a homebuyer needs to contribute to or amass in the home to avoid mortgage insurance.

Still, most homeowners don’t put 20 percent down. In 2022, the median down payment among homebuyers was 13 percent, according to the National Association of Realtors (NAR). For a $350,000 house, a 13 percent down payment would be $45,500, as opposed to a 20 percent down payment of $70,000.

Minimum down payment requirements

Conventional loan: 3 percent to 25 percent

The down payment requirements for a conventional loan vary depending on the lender, the borrower and the type of property. For example, first-time homebuyers and buyers with low to moderate incomes could qualify for a fixed-rate conventional loan with a 3 percent down payment. Some lenders require a minimum of 5 percent.

If you’re buying a second home or an investment property with a conventional loan, the down payment requirement is usually higher. Second homes typically start at 10 percent, and investment properties can require as much as 15 percent to 25 percent. That said, the amount you need to put down can depend on your creditworthiness and financial situation, so consult with your loan officer to get a better idea of what requirements apply to you.

Keep in mind, too, that in order to avoid PMI, you’ll need to put down at least 20 percent. If you can’t afford that high of a down payment, though, know you won’t pay PMI forever: You don’t need to pay the premiums anymore once you reach 20 percent  equity in your home.

Jumbo loan: 10 percent

Jumbo loans are a specific type of conventional loan that (as their name implies) are for big sums — so big they don’t conform to the standards set by the Federal Housing Finance Agency (FHFA). In 2023, that means any conventional loan that exceeds $726,200 in most markets — though high-cost areas have higher limits. Jumbo loans typically require 10 percent down or more.

FHA loan: 3.5 percent

For a Federal Housing Administration (FHA) loan, the minimum down payment is 3.5 percent with a credit score of at least 580. If you have a credit score between 500 and 579, you can still get approved, but you’ll need a 10 percent down payment.

With an FHA loan, you’ll be required to pay MIP. This comes in two forms: an upfront MIP paid at closing that’s 1.75 percent of the loan amount, and an annual MIP added to your monthly mortgage payment. The annual MIP is based on the size of your down payment, loan amount and loan term

If you put down 10 percent or more, this annual MIP can be removed after 11 years. With a smaller down payment, it will be part of your payment for the life of the loan.

VA loan and USDA loan: Zero percent

The U.S. Department of Veterans Affairs (VA) and the U.S. Department of Agriculture (USDA) guarantee zero-down payment loans for qualified homebuyers.

VA loans are available to most members of the armed forces and veterans and their families. USDA loans, on the other hand, are available to borrowers planning to purchase homes in designated rural areas. The USDA has maps on its website that show which areas are eligible.

Neither loan program requires mortgage insurance. With VA loans, you’ll pay a one-time funding fee, which ranges from 1.25 percent to 3.3 percent depending on how many VA loans you’ve had and your down payment amount. With USDA loans, you’ll pay an upfront and annual guarantee fee, both of which are independent of your down payment amount.

How much should you put down on a house?

How much you should put down on a house is a personal decision that mainly depends on your finances and what loan program you use. Consider:

• Your financial goals: Is your goal to build home equity, or would you prefer to invest that money elsewhere, such as a retirement fund?
• How long you plan on staying in the house: Is this a starter home, or do you plan on being there long-term? If you plan on selling in five years to 10 years, you might not be as interested in putting a lot of money down.
• Your emergency savings: Don’t deplete your emergency fund just to make a larger down payment. You’ll need the cushion for unexpected expenses.
• Closing costs: Closing costs are a bundle of fees paid when you finalize your mortgage and purchase a home. They can include attorney fees and a loan origination fee, and usually cost 2 percent to 5 percent of the principal of your mortgage.
• Costs to upgrade and repair the home: When you move, you’ll likely need to pay for repairs or home improvements and buy new furniture or appliances.

Benefits of making a larger down payment

Your ability to save for a down payment is a good sign you’re ready for the financial commitment of homeownership. Here are some clear benefits to waiting until you can make a substantial down payment:

• Lower mortgage rate: The less money you borrow as a percentage of the home’s value, the less risk your loan poses to the mortgage lender. As a result, larger down payments tend to correlate with lower interest rates.
• More equity: The greater percentage of your home you own outright, the more equity you have. That can be especially handy if you’re looking to finance a big renovation project or other purchase because you can tap your home equity through a cash-out refinance, home equity loan or home equity line of credit (HELOC) to borrow money against the value of your home relatively inexpensively.
• Lower monthly payments: Because you’re borrowing less money and you likely have a lower interest rate, you can expect a lower monthly mortgage repayment, giving you more cash flow for other financial goals and lifestyle needs.
• Cheaper closing costs: The fees you pay to your lender at closing are usually calculated as a percentage of your loan’s total value, so the less you borrow, the less they’ll be at closing, too.
• More competitive offer: If you’re in a seller’s market and competing with several other buyers, a larger down payment can make your offer more competitive than the others. By showing that you can afford to put up more cash, you might give the seller more confidence that your loan will close.
• Less chance of becoming underwater on your mortgage: You could end up owing more money than what your home is worth if you finance too much of the purchase and your home ends up losing value. You can avoid this by putting more money down.

How to calculate your down payment

Because down payments are expressed as a percentage of the home’s sales price, you simply need to multiply the sales price by your target percentage to determine how much you’ll need to put down. Here are some examples of how much the down payment would be at different price points:

You can use Bankrate’s mortgage down payment calculator to get a sense of how different down payment amounts impact your monthly mortgage payment, and the interest you can save by putting more money down.