One key requirement for buying a home is saving up enough money for a down payment. You may have heard that putting down 20% is ideal, but minimum down payment requirements actually start at around 3% of the home price.
Here’s everything you need to know about down payments, from how they impact your mortgage and homebuying experience to choosing the ideal amount for your specific circumstance.
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What Is a Down Payment?
A down payment is the lump sum you initially pay out of pocket when you buy a home, usually a percentage of the home’s purchase price. How much you put down will affect your going forward, as well as certain loan terms.
For most homes, a down payment will usually be five figures, though it could reach six for higher-priced homes. For example, going by the national home median sales price of $$440,600 (as of June 2026, according to data from the National Association of Realtors), here’s what different down payments might look like:
— 3% down: $13,218
— 5% down: $22,030
— 10% down: $44,060
— 20% down: 88,120
Deciding how much to put down really depends on your situation. “The good thing is that we do have a lot of programs with down payment options as low as 3% all the way up to as much as you want to put down,” says Miguel Alcacio, community home lending advisor for Chase Home Lending in Chicago.
Should You Put Down 20%?
Many borrowers think the magic number to get a home mortgage is 20% down. But according to Jeremy Schachter, branch manager at Fairway Independent Mortgage Corporation in Phoenix, that’s not the case. “The misconception of 20% down as a minimum down payment is common since 20% down on a conventional loan is how you avoid mortgage insurance,” he says.
If you have the means, go for it. Making a down payment of 20% or more can put you in a more favorable loan, allow you to avoid paying mortgage insurance and reduce your monthly payments. However, you can certainly go lower to make your homeownership dreams come true a bit sooner.
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What Are the Minimum Down Payment Requirements?
If you’re in a position where you are ready to buy a home but haven’t amassed a lot of cash, you may be wondering what is the least amount you can put down. Here are the minimum requirements based on loan type.
— : 3%. “The majority of conventional loans are backed by Fannie Mae and Freddie Mac, and they are the most common choice for first-time and repeat borrowers,” says Schachter. “If you are a first-time home buyer, conventional loans require 3% down as a minimum down payment.” Repeat buyers can put down 3% to 5%.
— : 3.5%. The Federal Housing Administration loan is a government-backed loan that allows first-time homebuyers to put down just 3.5% on a 1-4 unit property. FHA loans are also available to people with lower credit scores from 500 to 579. For that group, the minimum down payment is 10%.
— : 0%. If you are a veteran or a military service member, you could qualify for a Veterans Affairs loan with no money down. “VA loans also do not have mortgage insurance included in their payment,” says Schacter, making it a very attractive option if you are eligible.
Other types of loans, such as or nonconforming loans, may have higher down payment requirements that vary by lender.
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Larger vs. Smaller Down Payment
According to the National Association of Realtors, the median down payment in 2025 was 19% for all home buyers, 10% for first-time home buyers and 23% for repeat home buyers. In other words, there is wiggle room for you to work with.
“A simple way to look at the down payment question is like a seesaw: you have the down payment on one side and the monthly mortgage payment on the other,” explains Kevin Watson, a senior home loan strategist with Churchill Mortgage in Brentwood, Tennessee. “The larger the down payment, the lower the monthly mortgage payment. And vice versa, of course.”
The Case for Larger Down Payments
Larger down payments can be beneficial in many ways. For example, it may help you qualify for lower rates and fees based on the lower loan size, says Watson. “Mortgage insurance monthly payments are also reduced with larger down payments until you get to 20% down, when you can eliminate mortgage insurance altogether,” he adds.
Other benefits of a large down payment include:
— More up-front equity in the home
— Makes you a more attractive buyer if there are other bidders
— More loan options available to you
— Less cost over the life of the loan
When a Smaller Down Payment Makes More Sense
While it might appear that putting all available funds toward your down payment is the best route, leaving yourself with limited cash can be risky. In fact, sometimes putting down too much of your available money is referred to as being “house poor.”
“A lot of first-time homebuyers are going to end up buying a fixer-upper, and might want to have some reserves to be able to make that happen,” says Alcacio. Not to mention, it’s always a good idea to have an ample cash reserve in case you face a financial emergency, such as losing your job or a health crisis.
Making a smaller down payment leaves you extra cash for:
— Covering
— An
— Home maintenance and repairs
— Other life goals and investment opportunities
Finding Your Down Payment Sweet Spot
While you aren’t required to put down 20%, you can also put down more than the minimum required. Work with your home lending advisor and perhaps loop in your financial advisor, too, to find an amount you’re comfortable with.
“We try to go over options like, what does a 5% payment look like, or a 10% payment?” says Alcacio. You can also use a to look at the numbers on your own if you’re still in the early planning stages.
Ultimately, your aim should be to put as much as possible down to reap the benefits of a higher down payment, while also leaving yourself a financial cushion you can tap if needed.
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Update 07/15/26: This story was previously published at an earlier date and has been updated with new information.
