How Much Should You Put Down on a House? 5%, 10%, 15%, and 20% Compared

Deciding how much to put down on a house is not just about reaching 20%. A larger down payment can reduce the amount you borrow and your monthly mortgage payment, while a smaller down payment can preserve more cash for emergencies, moving costs, repairs, and other goals.

For many buyers, the right number is the amount that makes the monthly payment comfortable without draining the cash reserves they may need after closing. Explore our comprehensive guide on how much house you can afford to see how your gross income and debt profile establish your overall purchase price ceiling.

This guide compares 5%, 10%, 15%, and 20% down payments using the same $400,000 home so you can see how the numbers change.

The 20% Down Payment Rule Is Not a Requirement

You do not necessarily need 20% down to buy a home.

Some conventional mortgage options allow eligible borrowers to put down as little as 3%, while FHA loans can allow 3.5% for eligible borrowers. Some qualifying VA and USDA borrowers may have access to financing with no down payment.

A 20% down payment can still be useful because a conventional loan with 20% down generally does not require borrower-paid PMI. But putting 20% down is not automatically the best choice if doing so would leave you with too little cash after closing.

The best down payment depends on your loan program, monthly budget, cash reserves, and financial goals.

5% vs. 10% vs. 15% vs. 20% Down: The Same $400,000 Home

To make the comparison easier, consider a $400,000 home with a 30-year mortgage at 6.5%. You can model your own loan term and amortization schedule using our mortgage calculator and review the standard PITI breakdown in our mortgage payment calculation guide.

The following figures are illustrative estimates. The PMI amounts are planning assumptions, not lender or insurer quotes. Property taxes, homeowners insurance, HOA fees, and other ownership costs are not included.

These numbers show the basic trade-off:

• A larger down payment means borrowing less.
• Borrowing less generally reduces principal and interest.
• A larger down payment may also affect mortgage insurance costs.
• A 20% down payment on a conventional mortgage generally means borrower-paid PMI is not required, although loan terms and lender requirements can vary.
• A smaller down payment leaves more money available for other financial needs.

The exact payment you receive from a lender will depend on your rate, loan program, credit profile, property, insurance, taxes, mortgage insurance, and other factors.

What Happens With a 5% Down Payment?

A 5% down payment on a $400,000 home would require $20,000 toward the purchase price.

The advantage is liquidity. You do not have to commit as much of your savings to the home, which can leave more money available for:

• Emergency savings
• Moving expenses
• Furniture and appliances
• Repairs and maintenance
• Closing costs
• Other financial goals

The trade-off is a larger mortgage balance and potentially higher mortgage insurance costs.

A 5% down payment can make sense for a buyer who has stable income and wants to preserve cash rather than put most of their savings into the property.

What Happens With a 10% Down Payment?

A 10% down payment on a $400,000 home is $40,000.

This can be a middle-ground option. You borrow less than you would with 5% down while keeping more cash available than you would with a 20% down payment.

A larger down payment reduces the loan amount and may lower the monthly mortgage payment, which can improve the debt-to-income (DTI) ratio calculation. Actual qualification depends on the lender's underwriting requirements. Mortgage insurance costs may also differ depending on the loan and borrower.

The important question is whether the lower payment is worth using an additional $20,000 of your available cash compared with the 5% scenario.

What Happens With a 15% Down Payment?

A 15% down payment on a $400,000 home is $60,000.

This moves you closer to the 20% level while still requiring less upfront cash than a full 20% down payment.

For some buyers, 15% can be a useful compromise between monthly affordability and liquidity.

However, the additional $20,000 compared with a 10% down payment should be evaluated against your emergency savings and other near-term expenses.

What Happens With a 20% Down Payment?

A 20% down payment on a $400,000 home is $80,000.

The main advantages are:

• A smaller mortgage balance
• A lower principal-and-interest payment
• Generally no borrower-paid PMI on a conventional mortgage
• Less interest paid over the life of the loan, assuming the same rate and loan term

However, putting $80,000 into the home may leave less cash available after closing.

A 20% down payment may make sense for buyers who can make the larger payment while still maintaining adequate cash reserves.

Down Payment vs. Cash to Close

Your down payment is not the same thing as your total cash to close.

Cash to close can include:

• Down payment
• Closing costs
• Prepaid expenses
• Initial escrow amounts
• Adjustments and credits

For example, if you put $40,000 down on a $400,000 home, you should not assume that $40,000 is all the cash you need to purchase the property.

Closing costs vary by transaction, location, lender, and loan type. You should also consider keeping money available for moving, repairs, furnishings, and emergencies.

Before deciding how much to put down, calculate the total cash required and determine how much savings would remain afterward.

How Much Cash Should You Keep After Buying?

There is no single reserve amount that works for every buyer.

A common planning benchmark is to keep an emergency cushion of at least three to six months of expenses, while also considering the cost of unexpected repairs, moving, furnishings, and other near-term homeownership expenses.

The right reserve depends on factors such as:

• Income stability
• Household expenses
• Job security
• Existing debt
• Expected repairs
• Other financial obligations
• Access to additional emergency funds

A down payment should not be viewed separately from your post-closing liquidity.

Minimum Down Payment Options

Minimum down payment requirements depend on the mortgage program and borrower eligibility. As detailed in our first-time home buyer's guide, several government-backed and conventional programs make homeownership accessible with smaller upfront deposits:

• Some conventional programs may allow eligible borrowers to put down as little as 3%.
• FHA loans can allow a down payment as low as 3.5% for eligible borrowers who meet applicable requirements.
• Qualifying VA borrowers may be eligible for financing with no down payment.
• Qualifying USDA borrowers may also be eligible for 100% financing in eligible areas.

These are program-level possibilities, not guarantees that every borrower will qualify.

Your lender can determine the specific minimum down payment and eligibility requirements for your situation.

How Does a Down Payment Affect PMI?

Private mortgage insurance, or PMI, can apply to some conventional mortgages when the down payment is below 20%.

A larger down payment reduces the amount borrowed and may affect the cost of mortgage insurance, but the actual PMI premium depends on the loan, borrower, insurer, and other underwriting factors.

A conventional loan with 20% down generally does not require borrower-paid PMI, although specific loan terms and lender requirements can vary.

For many conventional mortgages, borrowers may be able to request PMI cancellation when the loan reaches certain equity requirements, subject to applicable rules and conditions. In some scenarios, homeowners also explore when to refinance their mortgage to drop mortgage insurance once property values have appreciated.

So, How Much Should You Put Down?

There is no universal best percentage.

Instead, compare three things:

1. Monthly affordability: Can you comfortably afford the mortgage payment and other housing costs?
2. Cash to close: How much money will you need upfront beyond the down payment?
3. Remaining liquidity: How much savings will remain after buying the home?

A larger down payment may reduce your monthly payment, but it also uses more cash upfront.

A smaller down payment preserves liquidity, but it can mean a larger loan balance and potentially mortgage insurance.

The right choice is the one that balances these factors with your overall financial situation.

Use a Home Affordability Calculator

Instead of comparing down payments in isolation, calculate the full housing picture.

The LoanoraTools Home Affordability Calculator can help you explore:

• Home price
• Down payment
• Mortgage amount
• Interest rate
• Loan term
• Property taxes
• Homeowners insurance
• HOA costs
• Maintenance reserves
• PMI estimates
• Cash to close
• Liquid savings
• Monthly affordability
• Reserve assessment

Use the calculator to compare different down payment scenarios and see how changing the amount affects your estimated monthly housing cost and remaining cash.

Final Takeaway

The best down payment is not necessarily the largest one you can afford.

A 5%, 10%, 15%, or 20% down payment can each make sense in different situations.

Before choosing a percentage, compare:

• Your monthly housing cost
• Your total cash to close
• Your remaining emergency savings
• PMI or other mortgage insurance
• Your other financial goals

The goal is not simply to put more money into the house. The goal is to buy the home while keeping your overall finances comfortable and resilient.

Authoritative Sources & Editorial Disclosure

This educational guide draws from official lending standards, statutory mortgage rules, and housing agency guidelines:

• Consumer Financial Protection Bureau (CFPB) – Owning a Home Toolkit & Down Payment Guidance
• Fannie Mae – Conventional Mortgage Guidelines & Low Down Payment Options
• Freddie Mac – Down Payment Assistance Programs & 3% Down Options
• U.S. Department of Housing and Urban Development (HUD) – FHA 3.5% Loan Directory
• U.S. Department of Veterans Affairs (VA) – 0% Down Home Loan Guarantees
• U.S. Department of Agriculture (USDA) – Single Family Rural Housing Guarantees

Disclaimer: LoanoraTools provides educational calculations, not personalized financial advice. Actual mortgage costs, rates, fees, taxes, insurance, and loan terms vary by lender, loan program, and individual credit profile. Review your official Loan Estimate and consider consulting a qualified loan officer or financial advisor for your specific situation.