Key takeaways for your down payment strategy
- You don’t need 20% to buy a home. Most buyers put down far less. The median down payment in 2024 was 16.3%, and loan programs like FHA (3.5%), conventional (3%), VA (0%), and USDA (0%) all make homeownership accessible with much less cash upfront.
- Your loan type determines your minimum – and your monthly costs. Each loan program has different down payment requirements, credit score thresholds, and mortgage insurance rules. Understanding which loan fits your situation is the most important factor in deciding how much to put down.
- More down isn’t always better – it’s a tradeoff. A larger down payment means lower monthly payments, no PMI, and a stronger offer. But it also means less cash on hand for emergencies, closing costs, and repairs. The right amount balances what lenders require with what makes financial sense for your life
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. The typical down payment on a house is between 3% and 20% of the purchase price. The amount you’ll be required to put down may vary depending on the loan program you use to finance the home purchase.
Government-backed loans like USDA and VA allow down payments as low as 0%. On the other end of the spectrum, jumbo loans may require minimum down payments of 10% or more.
In this Redfin real estate guide, we’ll tell you how much you 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.
What is a down payment?
A down payment is the money you pay upfront when you buy a home. It lowers the amount you need to borrow, which can reduce your monthly payment and the total interest you pay over time. It also gives you ownership in the home right away.
How to calculate the down payment
Okay, so let’s break down an example. Imagine you’re looking at that $500,000 house. If you put down $50,000, that’s exactly 10% of the price right there, upfront. Then, you’d get a mortgage loan for the remaining $450,000, and you’d pay that back to the lender over time with your regular monthly payments, plus interest, of course.
You can also use a home affordability calculator to help you determine the right down payment for you and potential monthly mortgage payments.
According to a recent 2025 Redfin report by data journalist Dana Anderson, the typical U.S. homebuyer’s down payment in December was 16.3% of the purchase price, up from 15% a year earlier. In dollar terms, the median down payment was $63,188, up 7.5% from the previous year – the biggest increase in five months.
How much is a down payment on a house?
There’s no one-size-fits-all answer. The amount you put down on a house depends on your budget, your goals, and the type of loan you get. While 20% down is often seen as the ideal, it’s far from the only option.
Some loan programs let buyers put down just 3.5% or 5%, and others require no down payment at all. Keep in mind that lower down payment options often come with additional requirements, such as minimum credit scores, income limits, or mortgage insurance, which can affect your total monthly cost. Buyers who put down less than 20% may also be able to move forward by paying private mortgage insurance, also known as PMI.
Let’s look at what a down payment could look like on a $300,000 home based on the type of loan you choose.
With a conventional loan, you might put down 20% ($60,000) if you want a larger upfront payment. But there are also lower down payment options, like 3% ($9,000) or 5% ($15,000), which can make buying a home more manageable. These low-down-payment options are often designed for first-time buyers or borrowers who meet certain income guidelines.
With an FHA loan, the minimum down payment is usually 3.5%, or $10,500 on a $300,000 home.
If you qualify for a VA loan or USDA loan, you may be able to buy with no down payment at all.
As you can see, there’s no one-size-fits-all answer. The right down payment depends on your budget, your loan options, and what feels realistic for you.
Minimum down payments for loan types
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 private mortgage insurance (PMI) or use an alternative structure that increases your overall loan cost. Low-down-payment conventional options are often designed for first-time buyers or borrowers who meet certain income or credit requirements, so availability can vary.
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. Jumbo loans apply when the loan amount exceeds the conforming loan limits set annually by the Federal Housing Finance Agency (FHFA), which vary by location.
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.
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 are broken down into three categories: loans, grants, and credits.
Loans are typically in the form of a second mortgage. They are often deferred payment loans 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. Some of these loans are ‘forgivable,’ meaning the balance may be partially or fully eliminated over time if you meet certain conditions, such as staying in the home for several years.
Grants are funds that typically do not need to be repaid, as long as you meet the program requirements, such as living in the home for a set period of time. They can often be used toward your down payment, closing costs, or both.
Credits, often called mortgage credit certificates (MCCs), provide a federal tax credit based on a portion of the mortgage interest you pay each year, which can reduce your overall tax bill.
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.
Program availability, income limits, and eligibility requirements vary widely by state and local housing agencies.
Is a 20% down payment on a home mandatory?
While a 20% down payment has long been considered the traditional benchmark in real estate, it is not universally mandatory for purchasing a home. Many loan programs, such as FHA, VA, USDA, and even some conventional options, allow for significantly lower initial capital contributions. However, opting for a 20% down payment offers a range of substantial financial advantages and can strategically position buyers more favorably.
Advantages of a 20% down payment
Making a down payment of 20% or more often yields several key benefits for homebuyers:
- More favorable mortgage interest rates: A larger down payment signals reduced risk to lenders, as your Loan-to-Value (LTV) ratio is lower. This often translates to a marginally reduced interest rate, which can lead to significant savings over the life of the loan.
- Accelerated home equity growth: Committing a larger sum upfront means you immediately own a greater portion of your home. This accelerates your equity accumulation, a crucial component of personal wealth building and financial stability.
- Lower monthly mortgage payments: By borrowing a smaller principal amount, your monthly mortgage payments for principal and interest will be inherently lower. This frees up monthly cash flow, providing greater financial flexibility.
- Reduced closing costs: While not always a direct percentage of the down payment, some closing costs (such as lender fees based on loan amount) can be influenced by the total loan value. A lower loan amount can potentially lead to marginally lower overall closing costs.
- Elimination of Private Mortgage Insurance (PMI): This is one of the most significant direct cost savings. When you put down 20% or more on a conventional loan, lenders typically waive the requirement for PMI, an additional monthly premium that protects the lender, not the borrower.
- Enhanced offer competitiveness: In a competitive seller’s market, an offer with a higher down payment can be more attractive to sellers. It signals stronger financial backing and a greater likelihood that the buyer’s loan will be approved and the transaction will close smoothly.
FAQ: How much do down payment for a house?
How much should I put down on a $300,000 or $400,000 house?
It depends on your budget and loan type. On a $300,000 home, 3% down is $9,000, and 20% down is $60,000. On a $400,000 home, 3% down is $12,000, and 20% down is $80,000. Many buyers put down less than 20%, depending on the loan they choose.
Does a larger down payment affect my interest rate?
Sometimes. A larger down payment can help you qualify for a better rate, but lenders also look at your credit score, income, debt, and loan type.
Can I use retirement funds for a down payment?
Yes, in some cases. Buyers may use retirement funds for a down payment, but taxes, penalties, or long-term savings setbacks may apply.
What’s the difference between a down payment and closing costs?
A down payment goes toward the home’s purchase price. Closing costs are separate fees you pay to complete the sale.
How long does it take to save for a down payment?
It depends on your savings goal and how much you can set aside each month. For some buyers, it may take a few years, while others may save faster or take longer.
So, how much down payment do you need?
The down payment required to buy a home ultimately depends on your finances, homeownership goals, and the type of loan you choose. Whether you’re aiming for a traditional 20% down payment or exploring options for a 0% down payment home loan, various paths can lead you to homeownership.
If you’re ready to begin your home-buying journey, the Redfin mortgage calculator can be a valuable tool to estimate your down payment needs based on the home’s price and other financial details.
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