Qualifying
Down payment
Definition
A down payment is the part of a home’s price paid in cash rather than borrowed. Minimums range from 0% (VA and USDA) to 3–3.5% (some conventional and FHA loans) and more for jumbo loans. A larger down payment lowers the loan, the payment and, below 80% LTV, removes mortgage insurance.
Down payment, explained
Down payment is separate from closing costs, which buyers also need to budget.
See down payment in a calculator
The Down Payment Calculator shows how this works with real numbers. Set a down payment goal and see how long it takes to save for it.
Open the Down Payment CalculatorRelated terms
- Loan-to-value ratio (LTV)Loan-to-value (LTV) is the loan amount divided by the property’s appraised value or price, whichever is lower, expressed as a percentage.
- Private mortgage insurance (PMI)Private mortgage insurance (PMI) protects the lender on a conventional loan when the borrower puts down less than 20%.
- Closing costsClosing costs are the fees and prepaid items due when a mortgage closes, beyond the down payment: lender fees, appraisal, title insurance, recording fees, transfer taxes, prepaid interest and initial escrow deposits.
Q.01What is down payment?
A down payment is the part of a home’s price paid in cash rather than borrowed. Minimums range from 0% (VA and USDA) to 3–3.5% (some conventional and FHA loans) and more for jumbo loans. A larger down payment lowers the loan, the payment and, below 80% LTV, removes mortgage insurance.
Q.02Do I need 20% down to buy a house?
No. Many loans allow far less; 20% simply avoids PMI on a conventional loan.
Explain it with their numbers
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