The amount of cash you put toward the home purchase upfront. Everything else is financed by the mortgage. Lower down payments are possible — sometimes as low as 0% or 3%.
The down payment is the money you bring to the table to buy a home. It's the difference between the home's purchase price and the loan amount. Bigger down payments mean lower monthly payments, less paid in interest over time, and often a better interest rate.
The traditional "20% down" benchmark comes from one thing: that's the threshold where you avoid private mortgage insurance (PMI) on a conventional loan. But it's not required to buy a home. Most loan programs allow much less:
Conventional: as low as 3% for first-time buyers
FHA: 3.5% with credit scores of 580+
VA: 0% for eligible veterans and service members
USDA: 0% for eligible rural and suburban areas
The right down payment isn't always the biggest one — keeping cash reserves for emergencies and home expenses matters too.
Example
On a $400,000 home: 20% down = $80,000 (no PMI). 10% down = $40,000 (~$135/month PMI). 5% down = $20,000 (~$200/month PMI). 3% down = $12,000 (~$240/month PMI). All four are valid paths.
Also known as
down payment, down payment amount, cash down
Source:
CFPB