How much do I actually need to put down?
Less than you think, and the number depends entirely on which loan you use. This calculator shows the minimum for each program side by side on your purchase price, along with the piece that actually decides the comparison.
Is 20% down still required?
It never was. Twenty percent is the point where conventional financing stops charging mortgage insurance, which is a different thing from a requirement, and the two got conflated decades ago and never untangled.
You can buy with far less on every program in the table. Veterans and eligible service members can buy with nothing down. What changes at each level isn't whether you're allowed to buy, it's what you pay monthly for the privilege of putting less in.
What does a smaller down payment really cost?
Mortgage insurance, and that's the column to look at.
When you compare putting 3% down against 10% down, you're not really comparing down payments. You're comparing two monthly payments where the difference is partly principal and interest and partly an insurance premium you don't get back. The calculator puts that premium next to each option, because it's the number the decision actually turns on and almost nobody shows it.
When does mortgage insurance go away?
This is the part that changes the answer, and it depends on the program.
Conventional mortgage insurance ends. Once you reach enough equity it comes off, through appreciation or principal paydown or both, and the payment drops for the rest of the loan.
FHA mortgage insurance usually doesn't. On most FHA loans today the annual premium stays for the life of the loan regardless of how much equity you build, and the only way out is refinancing into something else.
So a comparison that only looks at the monthly payment on day one is missing the larger half of the story. An FHA loan that's cheaper this year can cost far more over the time you hold it, and for a borrower who can qualify conventional, that's usually the real decision rather than the down payment itself.
Should I put more down or keep the cash?
Depends on what the cash is doing otherwise and what you'd have left.
More down means a smaller loan, a lower payment, and less or no mortgage insurance. It also means less in reserves, and a borrower who puts every dollar into the down payment and closes with nothing behind them is in a fragile position the first time something breaks.
Lenders want to see reserves. So should you. Being house-poor on paper is a qualifying problem. Being house-poor in practice is a worse one.
What this doesn't include
Closing costs, which are separate from the down payment and often surprise people, and prepaid items like property taxes and insurance collected at closing. The cash you need to close is more than the down payment alone.
Want the real cash-to-close number for a specific property? Send me the details.