How Much Down Payment Do I Need?

You need whatever the program and the lender overlay require, plus closing costs. Marketing still talks as if 20% were the law. It is not. Twenty percent is the usual point where conventional PMI goes away.

Typical minimums

Conventional first-time programs can allow 3% or 5%. FHA is typically 3.5% with qualifying credit. VA can be 0% with entitlement. USDA (not modeled here) can also be 0% in eligible areas. Lenders can require more.

Cash to close is down payment + closing costs − credits. Closing costs of 2–4% on a $350,000 loan are $7,000–$14,000. A 3.5% FHA down payment of $12,250 is not the whole check you write.

Why 20% still matters

On conventional loans, PMI stops being required at 20% down (or when you later reach that equity). The payment drop can be $100–$300. You also borrow less, so P&I is lower. The opportunity cost is tying up cash that could stay in reserves. Empty reserves plus a new roof is worse than PMI.

Worked example

$350,000 price, 6.5% 30-year. 5% down ($17,500): loan $332,500, P&I ≈ $2,101, plus PMI. 20% down ($70,000): loan $280,000, P&I ≈ $1,770, no PMI. Use the calculator at the top and the FHA or VA pages for those programs. Educational only.