Neighborhood block with lots of landscaping.

How Much Do I Need To Save For A Down Payment?

Anna Baluch4-minute read
February 02, 2022

*As of July 6, 2020, Rocket Mortgage® is no longer accepting USDA loan applications.

If you’re in the market for a house, it’s important to consider your down payment. Since the idea of a down payment can be complicated, especially if you’re a first-time homeowner, you may have several questions about it.


What exactly is a down payment? How does a down payment affect the life of a loan? What is the typical down payment on a house? How much do I need to save for a down payment? Fortunately, we’ll answer all of these questions below.

What Is A Down Payment?

A down payment is the cash you pay up front to get a home loan. Your down payment is deducted from your total mortgage amount. For example, if you buy a home for $250,000 and pay $25,000 as a down payment, your down payment is 10% of your entire home purchase.

Apply Online with Rocket Mortgage®

Get approved with Rocket Mortgage® and do it all online. You can get a real, customizable mortgage solution based on your unique financial situation.

Do I Have To Put 20% Down?

Whether or not you have to put 20% down on a house depends on the type of home loan you select. While some home loans require 20%, others are more lenient and accept borrowers with lower down payments. You may even find a way to purchase your home without a down payment, depending on your situation.

Why Put 20% Down On A House?

Even if your home loan doesn’t require 20% down, there are several noteworthy benefits of putting 20% down on a house. First and foremost, putting 20% down positions yourself as a less risky borrower. This may help you land a lower interest rate.


A 20% down payment can also reduce your monthly mortgage payments and protect you from having to pay private mortgage insurance (PMI), which conventional loans require for any borrower who puts down less than 20%.

How Much Do I Need For A Down Payment?

The amount of money you need for a down payment depends on the price of your home and the mortgage loan you choose. Let’s take a closer look at the most common home loans.

FHA Loans

FHA loans can give you the chance to buy a moderately priced home with a down payment of as low as 3.5%. If you don’t have the best credit and would like to buy a home without dishing out too much cash up front, an FHA loan may be a good option.

VA Loans

If you’re a veteran, currently serving in the military or are the spouse of a service member, you may be eligible for a VA loan. Believe it or not, you don’t have to put any money down if you opt for a VA loan.

USDA Loans

A USDA loan may make sense for you if you have a low to moderate income and wish to buy a home in an eligible rural area. Just like VA loans, USDA loans don’t come with any down payment requirements. You can get a USDA loan for 0% down.

Conventional Loans

If you aren’t eligible for a government-backed mortgage program like the FHA loan or USDA loan, a conventional loan may be the way to go. Conventional loans conform to the requirements set forth by Fannie Mae and Freddie Mac, two companies that provide money for the U.S. housing market.


In most cases, the minimum down payment for conventional loans is between 5% – 20% of the total sales price. However, if you go with a conventional loan and put less than 20% down, you’ll be required to pay PMI.

Jumbo Loans

A jumbo loan may be ideal if you’re looking to buy a luxury or high-priced home. Jumbo loans are loans whose principal balances exceed the conforming loan limits of Fannie Mae and Freddie Mac. While most jumbo loan lenders require 20% down, the required down payment may be higher depending on the property type and the number of units. 

Typical Down Payment On A House

According to a 2018 report from the National Association of REALTORS® (NAR), 55% of the buyers who took out a mortgage made a down payment of 6% or less of their entire home value. This number increases for first time home buyers, as 72% of them put down less than 6%. These numbers show that the typical down payment on a house is on the lower end and 20% down payments aren’t “the norm.”

Down Payment Assistance

If you’re having a difficult time saving for a down payment, a down payment assistance program may help you out. Down payment assistance programs are designed to provide aspiring homeowners with money to cover some (or all) of their down payments.


Federal, state, city and nonprofit agencies all offer these types of programs, which are usually only available to those who meet certain income and geographic requirements.

Pros And Cons Of A Lower Down Payment

With a lower down payment, you may be able to buy a home sooner. If your lifestyle requires you to move to a home right away, a lower down payment can allow you to do so. A lower down payment also gives you more money to pay for closing costs, furniture, renovations and the other costs associated with buying a home.


On the flipside, a lower down payment can lead to larger monthly payments. This can be risky if you’re unsure of what your future career and/or financial situation holds. You may also be required to pay PMI until you reach 20% equity.

Pros And Cons Of A Higher Down Payment

The greatest advantage of a higher down payment is a smaller loan. When you reduce the amount of money you need to finance, you’ll enjoy lower monthly payments and save money on interest. You can also shorten the term of your loan and become mortgage-free faster.


When it comes to cons, a higher down payment reduces your cash savings. This may be an issue if you want a hefty emergency fund and a certain amount of money in the bank.


Your situation is unique and unlike that of any other home buyer. Therefore, take the time to understand all of your down payment options so you can make an informed decision for your particular budget, lifestyle needs and personal preferences.

It’s possible that you already have enough savings to get started with the home buying process. If, after learning more about down payment options, you feel ready, getting preapproved with a mortgage lender can be a good first step. It’s typically quick and easy to do, so why not apply to get preapproved today?

Apply for a Mortgage with Quicken Loans®

Call our Home Loans Experts at (800) 251-9080 to begin your mortgage application, or apply online to review your loan options.

Anna Baluch

Anna Baluch is a freelance writer from Cleveland, OH who enjoys writing about all real estate and personal finance topics. Her work can be seen on LendingTree, Business Insider, Experian and other well-known publications.