Down Payment On A House: 6 Loan Types To Know In 2025
Learn down payment requirements for different loan types and discover you don't need 20 percent.
How Much Is A Down Payment On A House?
Many prospective homebuyers believe they must put down 20 percent of a home’s purchase price to qualify for a mortgage. This misconception often discourages people from pursuing homeownership. The reality is far more encouraging: you don’t need to put down 20 percent to get a mortgage, and some mortgages don’t even require a down payment at all. The amount you need to put down depends entirely on the type of loan you’re applying for and your individual financial situation.
A down payment represents the portion of a home’s purchase price that you pay upfront at closing, rather than financing through your mortgage loan. Understanding down payment requirements is crucial for anyone considering homeownership, as it directly impacts how much cash you need to have available before purchasing.
Understanding Down Payment Basics
Your down payment size will depend on the minimum amount required for the loan type you’re getting as well as how much you have saved for the purchase that you can comfortably part with. For example, if you plan to put down 10 percent on a $400,000 conventional loan, your down payment would equal $40,000. A 3 percent down payment — the minimum requirement for a conventional loan — would come to just $12,000 on the same property.
The median down payment for all buyers as of 2025 was 15 percent, according to the National Association of Realtors. This demonstrates that while many buyers do put down substantial amounts, the majority are not reaching that traditional 20 percent threshold. This shift reflects changing market dynamics and more flexible lending practices that make homeownership more accessible.
Minimum Down Payment Requirements By Loan Type
Different loan programs have varying down payment requirements. Here’s a comprehensive overview of the minimum down payment requirements across the most common mortgage types:
| Loan Type | Minimum Down Payment |
|---|---|
| Conventional Conforming Loan | 3 percent |
| Jumbo Loan | 10 percent |
| FHA Loan | 3.5 percent |
| VA Loan | None (0 percent) |
| USDA Loan | None (0 percent) |
| Second Home or Investment Property | 10-25 percent |
Conventional Loans: The 3 Percent Option
Conventional loans are among the most popular mortgage types and offer flexibility for qualified borrowers. The down payment requirements for a conventional loan on a primary residence vary depending on the lender, the borrower, and the property type. For example, first-time homebuyers and buyers with low to moderate incomes could qualify for a fixed-rate conventional loan with a 3 percent down payment.
However, you may not automatically qualify to make your lender’s lowest offered down payment. The amount you must put down will depend on several factors:
- Credit score
- Debt-to-income ratio (DTI)
- Savings and other assets
- Choice of house
Whatever the minimum required down payment on your conventional loan, keep in mind that if you put down less than 20 percent, you’ll have to pay for private mortgage insurance (PMI). This additional cost protects the lender in case you default on your loan. However, once you reach 20 percent equity in your home, you can request that your lender remove PMI from your monthly bill.
FHA Loans: Accessible Options for Various Credit Profiles
FHA loans are designed to help borrowers with lower credit scores or limited savings access homeownership. FHA loans require a minimum down payment of 3.5 percent with a credit score of at least 580. If you have a credit score between 500 and 579, you’ll need a 10 percent down payment.
No matter how large your down payment on an FHA loan, you’ll be required to pay mortgage insurance premiums (MIP). This insurance requirement remains in place for the life of the loan if your down payment is less than 10 percent, making it important to factor into your long-term mortgage costs.
VA and USDA Loans: Zero Down Payment Options
Veterans and eligible rural homebuyers have unique advantages in the mortgage market. VA loans and USDA loans both allow borrowers to purchase homes with zero down payment, meaning you don’t need to pay anything upfront toward the purchase price. This makes homeownership significantly more accessible for these groups.
For VA loans, eligible military service members can take advantage of this benefit through the Department of Veterans Affairs. USDA loans serve borrowers purchasing homes in rural areas, promoting homeownership outside urban centers.
Jumbo Loans: Higher Requirements for Luxury Properties
Jumbo loans finance properties above the conforming loan limits set by Fannie Mae and Freddie Mac. Because these loans carry higher risk for lenders, they typically require a 10 percent minimum down payment. These loans are designed for high-value properties and generally require stronger financial profiles from borrowers.
Second Homes and Investment Properties
If you’re buying a second home or an investment property with a conventional loan, the down payment requirement is usually higher than for a primary residence. Second homes typically start at 10 percent, and investment properties can require as much as 15 to 25 percent, depending on your creditworthiness and financial situation.
Lenders view investment properties as riskier because the borrower doesn’t live in the home and may be more likely to walk away from the loan if financial difficulties arise. Second homes fall somewhere in between primary residences and investment properties in terms of lender risk assessment.
How Your Credit Score Impacts Your Down Payment
Your credit score plays a significant role in determining the down payment amount you can qualify for. The lower your credit score, the more you may be required to pay upfront toward your home.
For example, FHA loan borrowers may have credit scores as low as 500. However, if your score is 579 or below, you’ll need to make a 10 percent down payment. If you have a score of 580 or higher, you can qualify to put down only 3.5 percent. A stronger credit score demonstrates to lenders that you’re a lower-risk borrower, which often translates to lower down payment requirements and better interest rates.
Down Payment Amounts by Home Price
The actual dollar amount of your down payment depends directly on the purchase price of the home. Here’s a helpful reference table showing down payment amounts at various percentages and price points:
| Home Price | 3% Down | 10% Down | 20% Down |
|---|---|---|---|
| $200,000 | $6,000 | $20,000 | $40,000 |
| $300,000 | $9,000 | $30,000 | $60,000 |
| $400,000 | $12,000 | $40,000 | $80,000 |
| $500,000 | $15,000 | $50,000 | $100,000 |
| $600,000 | $18,000 | $60,000 | $120,000 |
Regional Down Payment Variations
Down payment amounts vary significantly across different regions of the United States. The median home prices differ considerably, which directly impacts the actual dollar amount buyers need for their down payments. In the Northeast, the median existing single-family home sale price was $509,300 as of July 2025, resulting in down payments ranging from $15,279 at 3 percent to $101,860 at 20 percent. In the West, with a median price of $620,700, down payments range from $18,621 at 3 percent to $124,140 at 20 percent.
Understanding your local market conditions is essential for budgeting your down payment and determining your overall homeownership costs.
The Impact of Down Payment Size on Your Mortgage
Making a larger down payment can get you a lower interest rate and reduce your monthly mortgage payments. When you put down more money upfront, lenders view you as a lower-risk borrower. This reduced risk often translates into better loan terms and interest rates.
Additionally, a larger down payment means you’ll borrow less money, which results in lower monthly payments. Over the life of a 30-year mortgage, even small differences in your interest rate can save you tens of thousands of dollars.
Private Mortgage Insurance: An Important Consideration
When you put down less than 20 percent on a conventional loan, private mortgage insurance (PMI) becomes a required part of your mortgage payment. PMI protects the lender if you default on your loan. This insurance can add hundreds of dollars to your monthly payment, making it an important factor in your decision about how much to put down.
The good news is that PMI isn’t permanent. Once you build up 20 percent equity in your home through a combination of down payment and mortgage payments, you can request that your lender remove PMI from your monthly bill. Understanding your path to removing PMI can help you calculate the true cost of putting down less than 20 percent.
Using Mortgage Down Payment Calculators
You can use Bankrate’s mortgage down payment calculator to get a sense of how different down payment amounts impact your monthly mortgage payment and the interest you can save by putting more money down. These tools allow you to input various down payment percentages and see how they affect your overall loan costs, helping you make an informed decision about how much to put down based on your financial situation.
Frequently Asked Questions
Q: Do I really need to put down 20 percent on a home?
No. While 20 percent is a traditional benchmark, it’s not mandatory. Many loan programs allow down payments as low as 3 to 3.5 percent. The median down payment in 2025 was 15 percent, showing most buyers put down less than 20 percent.
Q: What’s the minimum down payment I can make?
The minimum depends on your loan type. Conventional loans require 3 percent minimum, FHA loans require 3.5 percent (with a 580+ credit score), and VA and USDA loans require zero percent down.
Q: What is private mortgage insurance (PMI)?
PMI is insurance required when you put down less than 20 percent on a conventional loan. It protects the lender and can be removed once you reach 20 percent equity in your home.
Q: How does my credit score affect my down payment requirements?
Lower credit scores typically require higher down payments. For FHA loans, borrowers with scores of 579 or below need 10 percent down, while those with 580+ can put down 3.5 percent.
Q: Are down payment requirements different for investment properties?
Yes. Investment properties typically require 15 to 25 percent down, while second homes usually require at least 10 percent. These are higher than primary residence requirements.
References
- How Much Is A Down Payment On A House? — Bankrate. 2025-11-29. https://www.bankrate.com/mortgages/how-much-is-a-down-payment-on-a-house/
- Do You Have To Put 20 Percent Down On A House? — Bankrate. https://www.bankrate.com/real-estate/20-percent-down-payment-for-house/
- Average Down Payment For First-Time Homebuyers — Bankrate. https://www.bankrate.com/mortgages/down-payment-for-first-time-homebuyers/
- What’s The Average Down Payment On A House? — Bankrate. https://www.bankrate.com/mortgages/average-down-payment/
- National Association of Realtors – Housing Data — National Association of Realtors. 2025-07-01. https://www.nar.realtor/
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