How much should I put down on a house?

Twenty percent avoids mortgage insurance and gets the best pricing, but 5% to 10% with PMI is extremely common and often the better decision if waiting means paying rent for years while prices rise.

What is PMI and how much does it cost?

Private mortgage insurance protects the lender if you default. It typically costs 0.3% to 1.5% of the loan amount per year, charged monthly, and depends on your credit score and loan-to-value ratio.

When can I stop paying PMI?

On a conventional loan you can request cancellation when the balance reaches 80% of the original value, and the servicer must cancel it automatically at 78%. Appreciation can get you there sooner with a new appraisal.

Can I buy a house with no money down?

VA loans for eligible veterans and USDA loans in qualifying rural areas both allow zero down. Both charge a one-time funding or guarantee fee instead of ongoing monthly insurance.

Does a larger down payment get me a lower interest rate?

Usually yes, in steps rather than smoothly. Lenders price in loan-to-value tiers, so crossing from 85% to 80% can move the rate while going from 84% to 82% may not.

Do I need extra cash beyond the down payment?

Yes. Closing costs run 2% to 5% of the price, and lenders often want to see cash reserves after closing. Budget for both before committing your entire savings to the deposit.

Can down payment money be a gift?

Most loan programmes accept gifted funds from family with a signed gift letter confirming the money is not a loan. Lenders will trace the deposit, so document it before it lands in your account.

Down Payment Calculator

Calculate down payment and monthly costs online free — PMI, LTV and total cash needed for a home purchase. Runs entirely in your browser — nothing uploaded.

100% Private — Runs entirely in browserInstant calculation & resultFree, no sign-up

Down payment amount, percentage & LTV

Home purchase price ($)Down payment target (%)Interest rate (%)Loan term (yrs)

Down payment needed$84,000
Loan amount financed$336,000
Loan-to-value (LTV) ratio80.00%
Monthly principal & interest$2,123.75
Estimated monthly PMINone ($0)No PMI required at 20%+ down.
Total monthly payment (P&I + PMI)$2,123.75

Calculated in your browser — nothing you type is sent anywhere.

What the down payment actually changes

A down payment does three separate things, and they are worth separating. It reduces the amount you borrow, which reduces the monthly payment and the total interest. It sets your loan-to-value ratio, which decides whether you pay mortgage insurance. And it affects the interest rate you are quoted, because lenders price risk against equity.

The calculator reports the cash required, the resulting loan amount, the monthly principal and interest, the monthly PMI if any, and the total monthly cost of the two combined.

The 20% threshold

Twenty percent is not a legal requirement and never has been. It is the point at which conventional lenders stop requiring private mortgage insurance. Below it you pay PMI, typically 0.3% to 1.5% of the loan a year, added to the monthly payment. On a $360,000 loan at 0.7%, that is $210 a month buying you nothing except the lender protection.

Conventional loans can go as low as 3% down with PMI.
FHA loans allow 3.5% down but charge mortgage insurance that usually lasts the life of the loan.
VA and USDA loans allow zero down for those who qualify, with a funding fee instead of monthly insurance.

Waiting to save more is not always right

Every extra percentage point saved lowers the payment, but the house may appreciate faster than you save, and you pay rent the whole time you wait. The honest comparison is the total cost of buying now with PMI against the total cost of renting for another two years and buying at a higher price. Run both scenarios above and compare the monthly totals rather than trusting the rule of thumb.

Conventional PMI is also cancellable. Once the balance reaches 80% of the original value you may request removal, and at 78% the servicer must remove it automatically.

Frequently Asked Questions

How much should I put down on a house?
Twenty percent avoids mortgage insurance and gets the best pricing, but 5% to 10% with PMI is extremely common and often the better decision if waiting means paying rent for years while prices rise.
What is PMI and how much does it cost?
Private mortgage insurance protects the lender if you default. It typically costs 0.3% to 1.5% of the loan amount per year, charged monthly, and depends on your credit score and loan-to-value ratio.
When can I stop paying PMI?
On a conventional loan you can request cancellation when the balance reaches 80% of the original value, and the servicer must cancel it automatically at 78%. Appreciation can get you there sooner with a new appraisal.
Can I buy a house with no money down?
VA loans for eligible veterans and USDA loans in qualifying rural areas both allow zero down. Both charge a one-time funding or guarantee fee instead of ongoing monthly insurance.
Does a larger down payment get me a lower interest rate?
Usually yes, in steps rather than smoothly. Lenders price in loan-to-value tiers, so crossing from 85% to 80% can move the rate while going from 84% to 82% may not.
Do I need extra cash beyond the down payment?
Yes. Closing costs run 2% to 5% of the price, and lenders often want to see cash reserves after closing. Budget for both before committing your entire savings to the deposit.
Can down payment money be a gift?
Most loan programmes accept gifted funds from family with a signed gift letter confirming the money is not a loan. Lenders will trace the deposit, so document it before it lands in your account.