Should I put 5%, 10%, or 20% down?

There's no universally "correct" down payment — it's a tradeoff between your monthly payment, how much cash you keep in reserve, and whether you pay mortgage insurance. 20% down avoids PMI and lowers your payment the most, but for many buyers, putting down less and keeping cash in reserve is the smarter overall move.

What actually changes at each level

• 5% down: Lowest upfront cash requirement, but the highest monthly payment and PMI cost of the three. Useful when getting into the market sooner outweighs the extra monthly cost, or when available loan programs make this the practical floor.
• 10% down: A middle ground — meaningfully lowers your loan amount and monthly PMI cost compared to 5% down, while leaving more cash on hand than 20% down.
• 20% down: Eliminates PMI entirely (on a conventional loan) and produces the lowest possible monthly payment for a given rate, but ties up the most cash and can leave a household with a thin reserve after closing.

The PMI factor

Private mortgage insurance (PMI) applies to most conventional loans with less than 20% down. It typically runs somewhere in the neighborhood of 0.3%–1.5% of the loan amount per year, added to your monthly payment, and can usually be removed later once you've built roughly 20% equity through paydown and/or appreciation. In other words, a lower down payment doesn't lock you into PMI forever — it's often a temporary cost.

Questions to ask yourself

1. After making this down payment, how many months of expenses would I still have in savings?
2. Is the monthly payment difference between options something my budget comfortably absorbs?
3. Do I have upcoming expenses (renovations, a car, a baby, a job change) that argue for keeping more cash liquid?
4. Would the money I'd put toward a larger down payment likely do more for me invested elsewhere, given my timeline?

There are also loan-program-specific minimums to be aware of — some conventional loans allow as little as 3% down for qualifying buyers, and FHA loans allow 3.5% down, each with different mortgage insurance rules. A lender can walk you through which programs you actually qualify for.

This page is for general educational purposes and is not personalized financial advice. PMI rates, loan minimums, and program eligibility vary by lender, loan type, and borrower profile — confirm specifics with a licensed mortgage lender.