How Much Should You Put Down on a House in 2026?

The traditional advice is to put 20% down on a house, but in 2026 that means $70,000 on a $350,000 home — a number that takes the average American 4 to 7 years to save. The reality is that most first-time buyers put down far less, and there are legitimate reasons to do so. Here is exactly how each down payment level affects your monthly payment, total cost, and whether you pay Private Mortgage Insurance.

On a $350,000 home at a 6.75% mortgage rate for 30 years, here is what each down payment tier looks like. At 3% down ($10,500): your loan is $339,500, monthly principal and interest is $2,201, PMI adds approximately $200 per month, total monthly housing cost is roughly $2,801. At 5% down ($17,500): loan is $332,500, monthly P&I is $2,156, PMI adds $185, total is roughly $2,741. At 10% down ($35,000): loan is $315,000, P&I is $2,043, PMI adds $150, total is roughly $2,593. At 20% down ($70,000): loan is $280,000, P&I is $1,816, no PMI, total is roughly $2,216.

The difference between 3% down and 20% down is $585 per month — or $7,020 per year. Over 30 years, putting 20% down saves approximately $145,000 in total payments compared to 3% down. That is a staggering number, but it does not tell the whole story. The question is whether waiting 3 to 5 additional years to save from $10,500 to $70,000 makes financial sense when home prices may be rising 3 to 5% per year during that time.

Private Mortgage Insurance is the hidden cost of putting less than 20% down. PMI protects the lender — not you — if you default on the loan. It typically costs 0.5% to 1% of the loan amount per year, or $140 to $280 per month on a $335,000 loan. The good news: PMI is not permanent. On a conventional loan, you can request PMI removal once you reach 20% equity, and it automatically drops off at 22% equity. On an FHA loan, however, mortgage insurance lasts the entire life of the loan regardless of equity — which is why many buyers refinance out of FHA once they build sufficient equity.

FHA loans require only 3.5% down and accept credit scores as low as 580, making them the most accessible option for first-time buyers. Conventional loans require a minimum of 3% down (through programs like Fannie Mae HomeReady) but typically need a 620+ credit score. VA loans for veterans and active military require zero down payment and charge no PMI at all — making them by far the best mortgage product available if you qualify. USDA loans also offer 0% down for eligible rural and suburban areas.

The save-for-20% versus buy-now-with-less debate comes down to three factors: how fast home prices are rising in your market, how much rent you are paying while saving, and the opportunity cost of your savings. If homes in your area appreciate 4% per year, a $350,000 home will cost $364,000 next year and $378,560 in two years. Meanwhile, you are paying rent ($1,800 per month = $21,600 per year) that builds zero equity. In many markets, buying sooner with 5% to 10% down and accepting temporary PMI costs less over 5 years than waiting to save 20% while renting and watching prices rise. For a detailed comparison specific to your market, use our guide on [how to save for a down payment](/blog/how-to-save-for-down-payment).

Where to save your down payment money matters. A high-yield savings account earning 4.2 to 4.8% APY is the right choice — not the stock market (too volatile for a 2 to 5 year timeline), not crypto (far too risky), and not CDs (early withdrawal penalties defeat the purpose). On $30,000 in down payment savings, a HYSA earns $1,260 to $1,440 per year compared to $3 at a traditional bank.

Use the [mortgage calculator](/calculators/mortgage) to compare monthly payments at different down payment levels with your specific home price and interest rate. The [affordability calculator](/calculators/can-i-afford) shows how much home you can actually afford based on your income and existing debts.

Frequently Asked Questions:

Is 3% down payment enough for a house? Yes, several loan programs allow 3% to 3.5% down. You will pay PMI, which adds $150 to $250 per month, but it gets you into a home years earlier than saving for 20%.

How do I avoid PMI without 20% down? Some lenders offer lender-paid PMI (LPMI) where you accept a slightly higher interest rate instead of a separate PMI payment. VA loans have no PMI regardless of down payment. Piggyback loans (80/10/10) use a second mortgage to avoid PMI.

Should I borrow from my 401k for a down payment? Generally no. You lose years of compound growth, may owe taxes and penalties, and must repay the loan through payroll deductions. The exception: some 401k plans allow hardship withdrawals for first-time home purchases with more favorable terms.

How long does it take to save a 20% down payment? On a $350,000 home, saving $70,000 at $1,500 per month takes about 47 months (just under 4 years) in a high-yield savings account. At $1,000 per month, it takes about 67 months (5.5 years).

Can I get gifted money for a down payment? Yes. Most loan programs allow gift funds from family members for part or all of the down payment. The lender will require a gift letter confirming the money is not a loan.