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You need 3-20% down for a conventional mortgage, 3.5% for FHA, and 0% for VA or USDA. Putting less than 20% down adds PMI of $100-300/month. On a $350,000 home, the difference between 5% down and 20% down is $52,500 cash upfront but saves $200+/month in PMI and gets you a lower interest rate. Here is every scenario.
| Loan Type | Minimum Down | PMI/MIP | Credit Score | Best For |
|---|---|---|---|---|
| Conventional | 3-5% | ✗ Required until 20% equity | 620+ (best rates at 740+) | Buyers with good credit and some savings |
| FHA | 3.5% | ✗ Required for life of loan | 580+ (3.5%), 500-579 (10%) | First-time buyers, lower credit scores |
| VA | 0% | ✓ No PMI ever | No minimum (lenders prefer 620+) | Veterans and active military |
| USDA | 0% | ~Small guarantee fee | 640+ recommended | Rural area buyers, income limits apply |
| Jumbo | 10-20% | Varies by lender | 700-720+ typical | Homes above $766,550 (2026 limit) |
$350,000 home, 30-year conventional at 7% (rate improves with larger down payment):
| Down Payment | Cash Needed | Loan Amount | Rate | P&I Payment | PMI | Total Monthly |
|---|---|---|---|---|---|---|
| 3% ($10,500) | $10,500 | $339,500 | 7.25% | $2,316 | $283 | $2,599 |
| 5% ($17,500) | $17,500 | $332,500 | 7.15% | $2,243 | $277 | $2,520 |
| 10% ($35,000) | $35,000 | $315,000 | 7.00% | $2,096 | $197 | $2,293 |
| 15% ($52,500) | $52,500 | $297,500 | 6.90% | $1,961 | $124 | $2,085 |
| 20% ($70,000) | $70,000 | $280,000 | 6.75% | $1,816 | ✓ $0 | $1,816 |
The jump from 3% to 20% down: $59,500 more cash upfront, but $783/month lower payment. That $783/month savings over 30 years = $281,880. Plus you avoid paying PMI entirely.
| Down Payment | Loan Amount | Annual PMI Rate | Monthly PMI | PMI Over 7 Years* | Total PMI Cost |
|---|---|---|---|---|---|
| 3% | $339,500 | 1.0% | $283 | $23,772 | Until 22% equity (~11 years) |
| 5% | $332,500 | 0.85% | $236 | $19,824 | Until 22% equity (~9 years) |
| 10% | $315,000 | 0.60% | $158 | $13,272 | Until 22% equity (~6 years) |
| 15% | $297,500 | 0.40% | $99 | $8,316 | Until 22% equity (~3 years) |
*Average time to reach 22% equity at each down payment level, assuming 3% annual appreciation.
$300,000 home purchase:
| FHA (3.5% down) | Conventional (5% down) | Conventional (20% down) | |
|---|---|---|---|
| Down payment | $10,500 | $15,000 | $60,000 |
| Loan amount | $289,500 | $285,000 | $240,000 |
| Interest rate | 6.75% | 7.15% | 6.75% |
| Monthly P&I | $1,878 | $1,922 | $1,557 |
| Monthly insurance | $133 (MIP) | $201 (PMI) | $0 |
| Total monthly | $2,011 | $2,123 | $1,557 |
| Insurance drops off? | ✗ Never (life of loan) | ✓ At 22% equity | N/A |
| Upfront fee | $5,066 (1.75% MIP) | $0 | $0 |
FHA trap: The mortgage insurance never goes away. On a $289,500 FHA loan, you pay $133/month for 30 years = $47,880 in MIP alone. Most borrowers refinance to conventional once they have 20% equity to escape FHA MIP.
You do NOT need 20% down to buy a house. Here is what actually matters:
If 20% down would leave you with no reserves, put 10% down and keep the cushion. Paying $158/month PMI is better than being house-rich and cash-poor.
Calculate your mortgage payment at every down payment level — see exactly how PMI affects your monthly cost.
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