How Much is a Down Payment on a House?

Key takeaways for your down payment strategy

• 20% isn’t required: You don’t always need a 20% down payment to buy a home, thanks to various loan options.
• Better interest rates: A larger down payment on a house can lead to lower mortgage interest rates, saving you money over time.
• Faster equity: Putting more money down means you build equity in your home more quickly.
• Lower monthly payments: Borrowing less translates directly to reduced monthly mortgage bills.
• No PMI: A 20% down payment helps you avoid Private Mortgage Insurance, an added monthly cost.
• Stronger offer: A higher down payment can make your purchase offer more competitive in a seller’s market. 

Down Payment on a House: How Much Do You Need?

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 initial capital contribution made by a buyer towards a property’s purchase price.

• It represents the portion of the home’s cost not covered by the mortgage.
• Typically expressed as a percentage of the total purchase price.
• Establishes the buyer’s immediate equity in the property.
• Reduces the mortgage principal, leading to lower monthly payments and total interest over time.
• Acts as a risk mitigant for lenders by lowering the loan-to-value (LTV) ratio. This reduced ratio signifies a smaller proportion of the home’s value is being financed, thereby decreasing the lender’s exposure to potential losses should the borrower default. A lower LTV can also qualify borrowers for more favorable loan terms and potentially eliminate the requirement for private mortgage insurance (PMI).

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 2024 Redfin report, the median down payment for homebuyers in December was 16.3% of the home’s purchase price. This is an increase from 15% a year earlier. In dollar terms, the median down payment was $63,188, up 7.5% from the previous year.

How much is a down payment on a house?

The short answer is, it depends. There are various factors that influence how much to put down on a house, like your long-term goals, finances, and the type of mortgage loan you get. While a 20% down payment is often preferred by lenders, it’s not necessarily “standard.” 

Several loan programs only require you to put down 3.5 or 5 percent of a home’s purchase price – there are even a few that require nothing down. You can also buy a home without a 20 percent down payment by paying for private mortgage insurance, or PMI. 

Let’s go back to our example of that $500,000 house and see what your down payment might look like depending on the loan type you choose:

1. Conventional loan (the “traditional” route):
   • 20% down payment: This would be $100,000. The big win here is you typically avoid Private Mortgage Insurance (PMI), which saves you a monthly fee. Plus, you often get better interest rates and lower monthly payments overall.
   • Low down payment conventional loans (3-5%): If you’re looking to put less down, you could pay 3% ($15,000) or 5% ($25,000). These are great for making homeownership more accessible, but just know you’ll almost certainly pay PMI on these, adding a bit to your monthly cost.
2. FHA loan (government-backed option):
   • Minimum 3.5% down payment: For a $500,000 home, this means a down payment of $17,500. FHA loans are fantastic if you have a lower credit score or fewer savings. The trade-off is you’ll pay FHA Mortgage Insurance Premium (MIP), which is usually for the life of the loan in most cases.
3. VA loan (for veterans & service members):
   • Often 0% down payment: That’s right, $0 down! If you’re an eligible veteran or service member, this is a huge benefit, and you also won’t pay PMI. Just be aware there’s usually a one-time VA funding fee, though some are exempt.
4. USDA loan (for rural properties):
   • Often 0% down payment: Again, $0 down is possible here! These loans are specific to homes in designated rural areas (so probably not central Dallas, but worth checking surrounding communities) and have income limits. They also come with mortgage insurance fees, similar to FHA.

As you can see, the “right” down payment for a $500,000 home depends on your financial situation and what type of loan fits you best.

How to get a down payment for a house?

Mortgage borrowers primarily leverage personal savings to finance their down payments. According to a recent Redfin survey, nearly half (48%) of prospective homebuyers intend to save directly from their paychecks. Other significant down payment strategies include taking on a second job (29%) and selling stocks (20%). Less prevalent methods reported were selling another home (16%) and utilizing an inheritance (11%).

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. 

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 PMI. 

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. 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. 

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.

Can you buy a house with no money down?

Yes, it’s possible! Certain loan programs, like VA loans (for eligible veterans and service members) and USDA loans (for properties in eligible rural areas), allow you to purchase a home with 0% down. Some credit unions and specific lender programs may also offer low or no-down-payment options.

When do you pay the down payment on a house?

Your down payment is typically paid at the closing of your home purchase. Any earnest money you provide when making your offer will usually be credited towards this total at closing. You’ll work with the title or escrow company to finalize the payment via wire transfer or cashier’s check on closing day.

Do you need a down payment when refinancing?

No, you generally do not need a down payment when refinancing a mortgage. You’re not buying a new home; you’re replacing your existing loan. Lenders will instead assess your home equity and creditworthiness. However, you will still typically need to cover closing costs associated with the refinance, though sometimes these can be rolled into the new loan.

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.

Grants are usually forgiven after a certain amount of time that you’ve lived in the home. They typically cover closing costs. Credits, also known as mortgage credit certificates, reduce what you pay in federal taxes by lowering how much you pay in interest on your mortgage loan. 

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. 

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.