How Much Down Payment Do You Really Need to Buy a House?

How much down payment do you need to buy a house? If you have heard that 20% is the minimum, you are not alone — but that number is one of the most persistent myths in homebuying. In 2026, most first-time buyers put down far less, and several loan programs start at 3% or even zero. This guide breaks down what each loan type actually requires, what PMI really costs, and why waiting years to save 20% can backfire.

The 20% Myth, Debunked

Twenty percent is not a qualification requirement — it is the threshold where private mortgage insurance drops off on conventional loans. Below 20%, you pay PMI. Above it, you do not. That single distinction has convinced millions of renters to delay buying for years while they chase a number that was never mandatory.

The data tells a different story. According to the National Association of Realtors, the median first-time buyer down payment in recent years has been 6–8% — not 20%. FHA, VA, and USDA programs exist specifically because most Americans cannot or should not tie up that much cash at once. If you have stable income and manageable debt, you can likely buy with far less than you think. For a deeper look at loan programs, see our FHA loan requirements guide.

Down Payment Requirements by Loan Type

Each mortgage program sets its own minimum. Your credit score, property type, and location can shift requirements within a program, but these are the standard floors buyers use in 2026.

Conventional and FHA are the most common paths for buyers without military service. VA and USDA remove the down payment hurdle entirely for those who qualify — see our VA loan benefits guide for veteran-specific details.

See How Your Down Payment Changes the Numbers

Adjust the down payment slider below to compare 3%, 10%, and 20% on the same income. You will see how each percentage shifts your maximum home price, monthly payment, and PMI cost.

The Real Cost of Waiting to Save 20%

Waiting to save a full 20% down payment sounds responsible — but the math often favors buying sooner with less down. Consider a $350,000 home in a market appreciating 4% per year.

Scenario A: You save for six years to reach 20% down ($70,000). By year six, that same home costs roughly $443,000 (4% annual appreciation). Your new 20% target is $88,600 — you saved $70,000 but the goalpost moved $18,600. Meanwhile you paid rent for six years and built zero equity.

Scenario B: You save for one year and buy with 3.5% FHA down ($12,250 on a $350,000 home). You lock in today's price, start building equity immediately, and pay FHA mortgage insurance instead of rent. Even with insurance costs, many buyers come out ahead because appreciation and principal paydown work in their favor from day one. Use our amortization schedule calculator to see how equity builds over time.

PMI: What It Actually Costs You

Private mortgage insurance protects the lender — not you — when you put less than 20% down on a conventional loan. PMI typically costs 0.5% to 1.5% of the loan amount annually. On a $332,500 loan (5% down on $350,000), that works out to roughly $139–$415 per month depending on your credit score and down payment percentage.

PMI is not permanent on conventional loans. Under the Homeowners Protection Act, lenders must automatically cancel PMI when your loan balance reaches 78% of the original home value, and you can request removal at 80% equity. Many buyers pay PMI for 5–7 years, then drop it through appreciation or extra principal payments. Read our full PMI guide for removal strategies.

Calculate Your PMI and Monthly Payment

Enter a home price and low down payment below to see your exact PMI estimate and full PITI breakdown — principal, interest, taxes, and insurance included.

How Much House Can You Afford With Less Down?

Your down payment size affects how much home you can buy, but income and debt matter just as much. Lenders use the 28/36 rule: housing costs should stay under 28% of gross monthly income, and total debt under 36%. A smaller down payment means a larger loan — and a higher monthly payment — so your price range may shrink even if you qualify.

Use the affordability calculator below with your actual income, debts, and preferred down payment to see your recommended and maximum home price at current rates.

Down Payment Assistance Programs by State

You may not need to save every dollar yourself. Down payment assistance programs — grants, forgivable loans, and employer benefits — exist in every state, though eligibility and amounts vary widely. Some programs require you to contribute 1–3% from your own funds alongside the assistance.

Our first-time homebuyer guide covers how to find state and local programs, and the first-time buyer calculator estimates how assistance affects your out-of-pocket costs. Also review what credit score you need — down payment and credit work together to determine your rate and PMI tier.