What Is Down Payment?
The cash you pay upfront when buying a home, separate from the mortgage loan amount.
Definition
The down payment is the portion of the home price you pay in cash at closing, while the rest is financed by the mortgage. A larger down payment means a smaller loan, lower monthly payment, and no PMI above 20%. Common minimums: 3% conventional (first-time buyers), 3.5% FHA, 0% VA/USDA. The 20% down rule is folklore now; the median first-time buyer in 2026 puts down about 8%.
Example
On a $400,000 home, 20% down = $80,000. 10% down = $40,000. 5% down = $20,000.
Use It
Try the Home Affordability CalculatorRelated Terms
PMI (Private Mortgage Insurance)Insurance lenders require on conventional loans when your down payment is below 20%.LTV (Loan-to-Value Ratio)The loan amount divided by the property's appraised value, expressed as a percentage.Closing CostsFees paid at the closing of a real estate transaction, typically 2-5% of the loan amount.