How Much Down Payment Do You Need for a House?

For repeat buyers, selling their current home could be enough to generate the thousands of dollars they need to buy their next home. But first-time buyers might find it a little more challenging to come up with the cash. According to research from the National Association of REALTORS® (NAR), 74% of buyers finance their home with a mortgage, which usually requires a down payment.

“First-time buyers face high home prices, high mortgage interest rates, and limited inventory,” says Jessica Lautz, deputy chief economist and vice president of research at NAR. Since lenders don't often offer loans for the entire purchase price, a down payment is usually necessary to secure a loan. Here's what you need to know about down payments and how much to save.

What is a down payment?

A down payment is the money you pay upfront toward a house purchase, with the rest of the cost financed with a home loan. It's usually a percentage of the overall purchase price.

What is the minimum down payment required?

How much you need to put down depends on the loan, your financial circumstances, the price of the home, and other factors.

Generally, you'll need to put down at least 3% of the loan amount if you're using a conventional loan, which is one of the most common loan types. FHA loans let you borrow with as little as 3.5% down. In some cases, such as with certain government-backed loans, you may be able to get a mortgage with no money down.

Keep in mind that a small down payment will usually require mortgage insurance. If you want to avoid paying private mortgage insurance (PMI), you'll typically need to put down at least 20%.

What is the average down payment on a house?

According to data from NAR, the median down payment on a house in 2024 was 18%. For a home priced at $350,000, that would be $63,000. First-time buyers put down a median of 9%, while repeat buyers put down 23%.

How does the down payment amount affect your mortgage?

The bigger your down payment, the better your terms, generally speaking.

“The down payment can make a huge difference to your loan terms and rate, depending on your credit score and loan type,” says Todd Huettner, a mortgage banker based in Colorado. “The difference can be a percentage point or more in interest rate and/or thousands of dollars of fees at closing.”

What are down payment assistance programs?

Down payment assistance programs offer help with your down payment if you qualify. You can find them through state and local housing finance authorities. These programs include loans with little to no interest charged or grants that don't need to be repaid. They often have eligibility requirements you'll need to meet, such as income limits, specific property types, or location. You might need to be a first-time homebuyer, and some programs require you to put at least a little of your own money into the transaction. But if you're eligible, you could receive thousands of dollars to put toward your down payment, making it easier to buy a home.

How can you save for a down payment?

Saving up for a down payment might mean making some temporary adjustments to your budget, and it definitely takes some discipline. But the short-term pinch can be worth it for long-term reward.

“My tried-and-true method I advise all my first-time buyers is to pay the mortgage payment now,” says Angela Tourville, a branch manager for Annie Mac Home Mortgage in Danielson, Connecticut. In other words, make sure you can comfortably cover the mortgage amount by practicing first.

“This not only helps you save, but it naturally challenges you to adjust your lifestyle to avoid, or adjust to, payment shock before it actually occurs,” Tourville says. She recommends putting the extra funds in a high-yield savings account, where the money can grow quickly but still stay liquid.

How much should you put down on a house?

The right amount to put down depends on your priorities. A bigger down payment could mean a smaller monthly mortgage payment and lower interest rates. On the other hand, a smaller down payment could mean buying a home (and starting to build equity) sooner rather than later.

“You should put enough money down to get into a home with a reasonable rate and monthly payment you can afford, while still having backup financial resources for when — not if — life throws you a curveball,” Huettner says. “If you can put down 20% and still have several months' savings, then put down 20%.”

“If you have 20% down, but it would completely drain your accounts, put down 10% or 5% so you have savings for an emergency,” Huettner adds. “I would rather see someone put down 1% to 3.5% and have six months of money in the bank than see them get a little bit better rate and lower mortgage insurance payment by putting down 10% but using their last penny to do it.”

How does the down payment affect PMI?

The bigger your down payment, the less risk there is for the lender. That can make your mortgage insurance premium less costly, says Kelly Cort, a senior loan officer with Guild Mortgage. The smaller your down payment, the pricier mortgage insurance will be.

However, other factors influence the cost of PMI, too, including your credit score, the type of mortgage, and the amount you'll be borrowing, so it's best to run the numbers to find the sweet spot for your situation.