How much should I put down on a house?
Enough to qualify comfortably while keeping an emergency reserve after closing. Twenty percent down avoids private mortgage insurance on a conventional loan and lowers the payment, but it is not required; many buyers put less down and pay PMI until their equity reaches the point where it can be removed. Draining savings to reach 20% can leave you exposed to the first repair.
The trade-offs
| Effect | Smaller down payment | Larger down payment |
|---|---|---|
| Monthly payment | Higher - larger loan, often PMI | Lower |
| Cash left after closing | More in reserve | Less |
| Private mortgage insurance | Usually required below 20% on conventional loans | Not required at 20% or more |
| Time to buy | Sooner | Later, while you save |
| Interest paid over the loan | More | Less |
Worked example: what PMI adds
PMI on a 5% down payment
Illustrative example - round numbers, not current market data. Calculated with Reaixo's calculator engines.
Assumptions
- Price and original value
- $400,000
- Loan
- $380,000 (5% down) at 6.5%, 30 years
- PMI rate (illustrative; set by the insurer)
- 0.5% of the loan a year
| Step | Calculation | Result |
|---|---|---|
| 1. Starting LTV | $380,000 ÷ $400,000 × 100 | 95% |
| 2. Annual PMI | $380,000 × 0.5% | $1,900 |
| 3. Monthly PMI | $1,900 ÷ 12 | $158.33 |
| 4. Month you can ask to cancel (balance at 80% of original value) | scheduled payments only | month 124 |
| 5. Month it ends automatically (78%) | scheduled payments only | month 135 |
Monthly PMI: $158.33. PMI adds about $158 a month. On the scheduled payments alone it can be cancelled on request after about 10 years and ends automatically after about 11 years - sooner if you prepay principal.
What this calculation leaves out
- Actual PMI pricing depends on credit score, LTV and coverage; get the figure from your Loan Estimate.
- Cancellation on request also requires a good payment history and evidence the home has not lost value.
- FHA mortgage insurance (MIP) follows different rules.
How to decide
- Keep cash for closing costs and several months of expenses after closing.
- Compare monthly payments at different down payments, including PMI.
- Check when PMI would end at each down payment.
- Put any extra toward the down payment only after your reserve is secure.
Frequently asked questions
Do I need 20% down to buy a house?
No. Many conventional and government-backed loans allow much less; below 20% on a conventional loan you will usually pay private mortgage insurance.
When can PMI be removed?
You can generally ask to cancel it when your balance reaches 80% of the home's original value, and it ends automatically at 78% if you are current on payments.
Is it smart to put more than 20% down?
It lowers the payment and interest, but only if you still keep a healthy cash reserve. Money in the house is hard to get back out quickly.
Calculators and guides
Recommended next step
See the payment, PMI and cash left over at each down payment.
Compare down payments and PMI →Sources and review
- What is private mortgage insurance?, Consumer Financial Protection Bureau. Supports: Private mortgage insurance is generally required on conventional loans with less than 20% down.
- When can I remove private mortgage insurance (PMI) from my loan?, Consumer Financial Protection Bureau. Supports: Requesting PMI cancellation at 80% of original value and automatic termination at 78%.
Where this applies: United States. PMI cancellation rules come from the federal Homeowners Protection Act; down payment minimums are set by each loan program and lender.
Last reviewed: · Updated:
Worked examples use illustrative round numbers, not current market data. Rates, limits and program rules change - confirm current figures with your lender or a qualified professional.
General educational information, not financial, legal, tax or real estate advice. Rules vary by loan program, transaction and location - verify important decisions with qualified professionals.