How much should I put down on a house?

Traditional advice is 20% to avoid PMI (Private Mortgage Insurance), but many buyers use 3-10% down with FHA, VA, or conventional loans. Larger down payments mean lower monthly payments and less interest over time. Balance down payment size against keeping emergency funds and investment opportunities.

What is PMI and how can I avoid it?

PMI (Private Mortgage Insurance) protects lenders when down payment is under 20%, typically costing 0.5-1% of loan amount annually. Avoid PMI by putting 20%+ down, using piggyback loans (80-10-10), or choosing lender-paid PMI (slightly higher interest rate). PMI typically drops off once you reach 20-22% equity.

Should I use my entire savings for a down payment?

No, maintain an emergency fund of 3-6 months expenses after your down payment. You'll also need cash for closing costs (2-5% of home price), moving expenses, immediate repairs, and furniture. Running out of cash after buying creates financial stress. Balance a strong down payment with adequate reserves.

What are typical down payment percentages by loan type?

Conventional loans: 3-20%, FHA loans: 3.5%, VA loans: 0% (for qualifying veterans), USDA loans: 0% (rural properties), Jumbo loans: typically 10-20%. First-time buyer programs may offer down payment assistance. Your credit score and financial situation determine which programs you qualify for.

How does down payment affect my monthly payment?

Every additional 5% down payment typically reduces monthly payments by $50-100 per $100,000 borrowed (varies by interest rate). A 20% down payment on a $300,000 home saves about $350/month compared to 5% down, plus eliminates $150-250/month in PMI. Run calculations to find your optimal balance.