Down payment
The cash you pay up front toward a home purchase. A larger down payment lowers your loan, your payment, and — at 20% or more — removes the need for PMI.
What does down payment mean?
Your down payment is instant equity and the single biggest lever on your loan size and payment. Crossing the 20% mark matters most: it removes private mortgage insurance on a conventional loan and often earns a better rate. Smaller down payments are possible — 3.5% on FHA, zero on VA and USDA — but they raise the balance you finance and usually the insurance you pay.
Minimum down payment by loan type
| Loan type | Minimum down | On a $400,000 home |
|---|---|---|
| Conventional | 3% | $12,000 |
| FHA (580+ score) | 3.5% | $14,000 |
| FHA (500–579 score) | 10% | $40,000 |
| VA | 0% | $0 |
| USDA | 0% | $0 |
| Jumbo | 10–20% | $40,000–$80,000 |
Where the money can come from
Lenders want to see that the down payment comes from an acceptable, documented source — usually your own savings or investments that have sat in your account for at least two months. Large unexplained deposits get questioned.
Gifts from family are widely allowed with a signed gift letter, and state housing-finance agencies offer down-payment assistance grants and second loans in every state. Putting down 20% on a conventional loan avoids PMI, but a smaller down payment that leaves you an emergency fund is often the safer choice.
Frequently asked
How much down payment do I need to buy a house?
The minimum is 3% on a conventional loan and 3.5% on FHA, while eligible VA and USDA buyers can put nothing down. Reaching 20% removes private mortgage insurance and usually earns a better rate.
Is it better to put more money down?
A bigger down payment lowers your loan, your monthly payment and — at 20% — your PMI, and can improve your rate. But keep an emergency cushion; draining every dollar into the down payment can leave you stretched after closing.
Put it to use
All glossary terms Down Payment Calculator
Turn a down-payment percentage into dollars and see whether you clear the 20% PMI threshold.
Mortgage Calculator with PMI
Include private mortgage insurance in your payment and find out exactly when PMI drops off.
Home Equity Calculator
See how much equity you have, your LTV and combined LTV, and how much of it a lender would let you borrow.