Mortgage Costs
How Much Down Payment Do I Need to Buy a Home?
Compare typical down payment ranges across conventional, FHA, VA, USDA, jumbo, and investment property loans, plus assistance program options.
Updated 2026-08-17| Applies to: Homebuyers comparing how much cash they may need upfront across different loan programs before setting a savings target.
The short answer
The down payment needed depends heavily on the loan program: conventional loans can allow as little as 3% down for qualified borrowers, FHA often uses 3.5%, VA and USDA loans can allow no down payment for eligible borrowers, and jumbo or investment property loans typically require more. Down payment assistance programs may also reduce upfront cash needed depending on eligibility. The right amount for you also depends on your monthly payment goals and whether mortgage insurance applies.
Is 20% down actually required?
No. The idea that 20% down is required for every mortgage is one of the most common misconceptions in home financing. Many programs allow considerably less, though putting down 20% on a conventional loan can help you avoid private mortgage insurance, which is a separate consideration from whether it is required.
How do down payment minimums compare across programs?
| Program | Typical minimum down payment | Notes |
|---|---|---|
| Conventional | As low as 3% for qualified first-time buyers | Private mortgage insurance often applies below 20% down |
| FHA | 3.5% with qualifying credit | Requires mortgage insurance premium for most of the loan term |
| VA | Often 0% for eligible veterans and service members | Funding fee may apply depending on circumstances |
| USDA | Often 0% in eligible rural and some suburban areas | Property and household income limits apply |
| Jumbo | Often 10 to 20% or more | Guidelines vary more by lender for larger loan amounts |
| Investment property | Often 15 to 25% | Higher down payments are common due to added risk |
What is down payment assistance?
Down payment assistance programs are offered by some state, county, and city agencies, as well as certain nonprofit organizations, to help eligible buyers cover part of their down payment or closing costs. These programs often come with their own income limits, homebuyer education requirements, or property location restrictions, and funding availability can change. A loan officer can help identify whether any programs might apply to your situation.
How does the size of a down payment affect the rest of the loan?
- A larger down payment generally reduces the loan amount, which can reduce the monthly payment.
- On conventional loans, reaching 20% down can avoid private mortgage insurance altogether.
- A larger down payment can sometimes help offset a lower credit score in the eyes of some lenders.
- Putting down more can also affect how much cash reserve you have left after closing, which is worth weighing carefully.
How should you decide how much to put down?
This depends on your savings, your monthly payment comfort level, whether you want to avoid mortgage insurance, and how much you want to keep in reserve for moving costs, repairs, or emergencies after closing. Running a few different down payment scenarios with a calculator or loan officer can help you compare the tradeoffs directly.
Down payment guidelines referenced here are general. Specific minimums depend on the lender, credit profile, property type, and current program rules.
Common mistakes to avoid
- Assuming you must save 20% before you can buy
- Not researching down payment assistance programs that might apply to you
- Putting every available dollar toward the down payment and leaving no reserves
- Overlooking that private mortgage insurance can often be removed later once equity increases
- Comparing down payment percentages without also comparing the resulting monthly payment
Related loan programs
Conventional Loans
The most widely used financing for primary homes, second homes and rentals.
FHA Loans
Government insured financing with flexible credit and down payment guidelines.
VA Loans
A benefit earned through service, with no required down payment for eligible buyers.
USDA Loans
Rural development financing with no down payment in eligible areas.
Frequently Asked Questions
People also ask
Is APR always higher than the interest rate?
Usually APR is equal to or higher than the interest rate because it factors in certain additional costs, though the exact difference depends on the fees included in the calculation.
Read: How to Compare Mortgage Rates the Right WayCan I switch from FHA to conventional later?
Many borrowers refinance from FHA to conventional once they have enough equity and qualifying credit, which can remove ongoing mortgage insurance, though refinancing has its own costs to weigh.
Read: FHA vs Conventional Loans: How Do They Compare?Are discount points tax deductible?
Points may be deductible in some circumstances, but tax treatment depends on your situation, so it is worth checking with a tax professional.
Read: Mortgage Points, Fees, and Lender Credits: What Do They Mean?Are closing costs the same for every loan program?
No. Some programs have specific limits on certain fees or allow different levels of seller contribution, so costs can vary by program even for the same purchase price.
Read: How Much Will My Closing Costs Be?Do I need 20% down to buy a home?
No. Many programs allow down payments well below 20 percent, though mortgage insurance may apply depending on the loan and down payment amount.
Read: How to Save for a Down PaymentCan PMI be removed without refinancing?
Often yes. Once the loan balance reaches a certain percentage of the original or current home value and payment history qualifies, borrowers can typically request cancellation directly from their servicer without a refinance.
Read: Private Mortgage Insurance (PMI) ExplainedTerms used in this guide
- Loan to Value
- The loan amount divided by the property value. A $200,000 loan on a $250,000 home is an 80% LTV.
- Down Payment
- The portion of the purchase price you pay from your own funds or eligible gift funds rather than borrowing.
Guidance by Manny
Manny Oloyede
Mortgage Broker | NMLS 1824463
Ultimate Mortgage Brokers LLC NMLS #2619461 | Licensed in OH | KY | NC | PA | SC | TN | TX
I have worked in mortgage lending since 2018 out of the Akron / Cuyahoga Falls Branch, helping buyers, homeowners and investors across Northeast Ohio and every state where I am licensed. These guides reflect the questions I answer most often, written the way I would explain them on a call.
Keep reading
Using Gift Funds for Your Down Payment
Which loan programs allow gift funds for a down payment, who can give them, and how gift letters, sourcing, and wiring documentation work.
First Time HomebuyersHow to Save for a Down Payment
Explore practical strategies for saving toward a down payment, how sourcing and seasoning of funds works, and how down payment assistance and gift funds fit in.
Mortgage CostsPrivate Mortgage Insurance (PMI) Explained
How private mortgage insurance works on conventional loans, how it differs from FHA mortgage insurance, and when it can be removed.
Mortgage ProgramsFHA vs Conventional Loans: How Do They Compare?
Compare FHA and conventional mortgages on down payment, credit, mortgage insurance, property rules, loan limits and long term cost so you can weigh which path may fit.
Questions about your own numbers?
Send over your goal, income type and timeline and you'll get a straight answer on what is realistic.