While 20% is the traditional benchmark, first-time buyers can put down as little as 3% (conventional) or 3.5% (FHA). On a $350,000 home, that's $10,500–$70,000 depending on the loan type.
The "right" down payment depends on your financial situation and the loan program you choose. Here's the breakdown:
• **Conventional loans**: Minimum 3–5% down. Below 20%, you'll pay Private Mortgage Insurance (PMI) of $100–$300/month until you reach 20% equity. • **FHA loans**: Minimum 3.5% down with a credit score of 580+. FHA mortgage insurance is required for the life of the loan (unless you refinance). • **VA loans**: 0% down for eligible veterans and active military. No PMI required. • **USDA loans**: 0% down for eligible rural properties.
Putting 20% down eliminates PMI, gives you instant equity, results in lower monthly payments, and often qualifies you for better interest rates. But waiting years to save 20% means missing out on home price appreciation and building equity.
Don't forget closing costs (2–5% of purchase price), which are separate from the down payment. On a $350K home, expect $7,000–$17,500 in closing costs.
FHA (3.5% min), Conventional (3–5% min), VA (0%), USDA (0%). Each has different requirements for credit score, income, and property type. FHA is most accessible for first-time buyers.
Below 20% down, PMI adds $100–$300/month to your payment. On a $300K loan, PMI at 0.7% costs $175/month. It's removed once you reach 20% equity (except FHA loans).
20% of $250K is $50K; 20% of $500K is $100K. In expensive markets, even 10% down can be a significant sum. Consider whether a smaller down payment lets you buy sooner and start building equity.
Many states offer down payment assistance grants ($5,000–$25,000), low-interest second mortgages, or tax credits for first-time buyers. Research programs in your state — you may qualify for significant help.
Use our free Down Payment Calculator to calculate your personalized answer based on your specific situation.