How much down payment do I need to buy a house?

There is no single number. FHA loans allow 3.5% down with a 580+ credit score (10% if 500-579), conventional loans start at 3% for first-time buyers, and 20% is the line that skips private mortgage insurance -- not the minimum to buy. The National Association of Realtors puts the median first-time buyer down payment near 8%. The real target is cash to close: down payment plus 2-5% in closing costs.

How much down payment on a $400,000 house?

At 10% down on a $400,000 home you post $40,000 and borrow $360,000. At 7% on a 30-year loan that is $2,395 a month in principal and interest, about $156 a month in PMI, and roughly $52,000 in total cash at closing (down payment plus 3% closing costs). PMI falls off automatically when the balance reaches 78% of the price -- around month 115, or 9 years 7 months in.

How much is PMI on a house with less than 20% down?

As a planning estimate, conventional PMI runs about 0.32% to 0.90% of the loan per year depending on loan-to-value. Worked example: a $360,000 loan at 90% loan-to-value (10% down on $400,000) at roughly 0.52% a year costs about $156 a month. Your lender's actual quote moves with credit score, so treat this as a budgeting figure, not a quote.

What does FHA mortgage insurance cost?

FHA loans charge two mortgage insurance premiums: an upfront premium of 1.75% of the loan, normally financed into the balance, and an annual premium of 0.55% collected monthly. Worked example: a $386,000 FHA loan carries a $6,755 upfront premium (financed, so the amortized loan is $392,755) and about $177 a month in ongoing MIP. Put less than 10% down and the MIP stays for the life of the loan.

Is it better to wait and save 20% down?

Not automatically. The 20% myth costs buyers years: the gap between 3.5% and 20% down on a $400,000 home is $66,000, which takes 44 months to close at $1,500 a month saved. While you wait you pay rent and miss appreciation and paydown. Buying sooner with PMI and dropping it at 78% loan-to-value often wins in rising markets -- run the cash-to-close and monthly cost both ways before deciding.

Entry № 21 · logged Oct 9, 2026Free, no sign-upMoney · Home

What does your down payment really cost?

The down payment is the check you write on closing day — but the percentage you post decides your monthly payment, your mortgage insurance, and how many years of savings you need before the keys. This settlement sheet prices all three.

Prefilled at a $400,000 home with 10% down at 7% on a 30-year conventional loan: $40,000 down, about $156 a month in PMI that falls off in month 115, and $52,000 in total cash at closing.

The down-payment docket, Form DP-21. Pick the loan program on the tabs, post the price and the percentage you can put down, and the sheet posts the monthly payment, the insurance the lender charges for the small down, the month that insurance drops off, and the cash you need at the closing table.

The purchase Home price ($)

Down payment

10%

$40,000 down on $400,000

Conventional minimums run 3–5% for most buyers (3% first-time-buyer programs); FHA allows 3.5% at a 580+ score and 10% at 500–579; VA allows 0%. 20% is the line that skips mortgage insurance — not the minimum to buy.

Interest rate (% APR) Loan term

The monthly carrying cost

Property tax (% of price / yr) Homeowner insurance ($ / yr)

HOA dues ($ / month, 0 if none)

Closing day Estimated closing costs (% of price) Lender fees, title, and recording typically run 2–5% of the price. Your lender’s quote replaces this estimate. What you can save toward it ($ / month)

Cash needed at closing $52,000 $40,000 down + $12,000 closing costs · 35 months of saving at $1,500/mo

The monthly payment, itemizedConventional · 30-yr

Loan amount$360,000 at 90.0% loan-to-value$360,000
Principal & interest$2,395.09
PMIestimate — lender quotes by credit score$156.00
Property taxmonthly share$366.67
Homeowner insurancemonthly share$150.00
HOA$0.00
Total monthly$3,067.76

PMI falls off in month 115 — about 9 years 7 months in, when the balance crosses 78% of the price. After that the payment drops by the PMI amount automatically.

closing daymonth 115loan paid off

WORKING TERMS PMI priced in and on a dated drop schedule. The small down buys years of occupancy; the insurance is the carrying charge.

The down-payment ladder — same house, different checks
Down	Check	P&I	PMI/MIP	Monthly	Cash at close

The ladder runs your price, rate, term, tax, insurance, and HOA at each down-payment level on the selected program, so the rows compare checks, not scenarios. Your row is tinted.

PMI rates are planning estimates by loan-to-value band — actual quotes move with your credit score and lender. FHA figures use the standard 1.75% upfront and 0.55% annual MIP; VA uses the 2.15% first-use funding fee. Figures are estimates for illustration, not a loan offer or financial advice.

Posted at the bottom of the sheet

How much down payment do I need to buy a house?: There is no single number. FHA loans allow 3.5% down with a 580+ credit score (10% if 500–579), conventional loans start at 3% for first-time buyers, and 20% is the line that skips private mortgage insurance — not the minimum to buy. The National Association of Realtors puts the median first-time buyer down payment near 8%. The real target is cash to close: down payment plus 2–5% in closing costs.
How much down payment on a $400,000 house?: At 10% down on a $400,000 home you post $40,000 and borrow $360,000. At 7% on a 30-year loan that is $2,395 a month in principal and interest, about $156 a month in PMI, and roughly $52,000 in total cash at closing (down payment plus 3% closing costs). PMI falls off automatically when the balance reaches 78% of the price — around month 115, or 9 years 7 months in.
How much is PMI with less than 20% down?: As a planning estimate, conventional PMI runs about 0.32% to 0.90% of the loan per year depending on loan-to-value. A $360,000 loan at 90% loan-to-value (10% down on $400,000) at roughly 0.52% a year costs about $156 a month. Your lender’s actual quote moves with credit score, so treat this as a budgeting figure, not a quote.
What does FHA mortgage insurance cost?: FHA loans charge two premiums: an upfront premium of 1.75% of the loan, normally financed into the balance, and an annual premium of 0.55% collected monthly. On a $386,000 FHA loan the upfront premium is $6,755 (financed, so the amortized loan is $392,755) and the ongoing MIP is about $177 a month. Put less than 10% down and the MIP stays for the life of the loan.
Is it better to wait and save 20% down?: Not automatically. The gap between 3.5% and 20% down on a $400,000 home is $66,000 — 44 months of saving at $1,500 a month. While you wait you pay rent and miss appreciation and paydown. Buying sooner with PMI and dropping it at 78% loan-to-value often wins in rising markets. Run the cash-to-close and the monthly cost both ways before deciding.

What does your down payment really cost?

Posted at the bottom of the sheet

Filed under down payments