What Is Down Payment?
Down Payment: The part of the purchase price you pay in cash instead of borrowing.
The down payment is the share of the purchase price you pay upfront. The rest is the loan. On a $400,000 home with 10% down, you pay $40,000 and borrow $360,000.
Minimums by program
| Program | Minimum down |
|---|---|
| Conventional | 3% (first-time buyers), 5% otherwise |
| FHA | 3.5% (580+ score) or 10% (500–579) |
| VA | 0% |
| USDA | 0% |
| Jumbo | Often 10%–20% |
| Investment property | Usually 15%–25% |
Why more down helps
- Lower loan-to-value ratio, which often means a better rate
- Smaller loan and monthly payment
- At 20% down on conventional loans, no private mortgage insurance
Why less down can make sense
Waiting years to save 20% while prices and rents rise can cost more than mortgage insurance. Keeping cash for reserves and repairs matters too.
Good to know
Your down payment must come from acceptable, documented sources: savings, investments, retirement accounts, gift funds or approved assistance programs.