The down payment range for a $300,000 house
For a $300,000 house, your down payment will likely fall between $9,000 and $90,000, depending on which loan program you use. The most common range is 3 to 20 percent of the purchase price. A 3 percent down payment is $9,000; a 20 percent down payment is $60,000. Most first-time buyers put down somewhere between 5 and 10 percent, which would be $15,000 to $30,000 on a $300,000 purchase.
The exact amount you need depends on the loan type you may have access to for, your credit score, your debt-to-income ratio, and what the lender requires. Putting down less than 20 percent means you will pay mortgage insurance — an extra monthly cost that protects the lender if you stop paying. That insurance stays on your loan until you build enough equity or refinance.
Key Takeaways
- First-time buyers can put down as little as 3 percent ($9,000) with FHA loans or conventional loans, though lenders vary in their minimums.
- Putting down 20 percent ($60,000) eliminates mortgage insurance but is not required — most first-time buyers pay between 5 and 10 percent.
- Your credit score, debt-to-income ratio, and savings affect both whether you may have access to and what interest rate you receive.
- Mortgage insurance costs 0.5 to 1.86 percent of your loan amount per year, added to your monthly payment, and stays until you reach 20 percent equity or refinance.
- Down payment assistance programs exist in many states and counties, though they vary widely in income limits and what they cover.
How loan type changes your down payment requirement
Different loan programs have different minimum down payments. FHA loans, backed by the Federal Housing Administration, allow down payments as low as 3.5 percent ($10,500 on a $300,000 house). FHA loans are designed for first-time buyers and people with lower credit scores, though you will pay mortgage insurance for the life of the loan, not just until you reach 20 percent equity.
Conventional loans — mortgages not backed by a government agency — typically require 3 to 5 percent down from first-time buyers, though some lenders go as low as 3 percent. Conventional loans with less than 20 percent down require PMI (private mortgage insurance), which you can remove once you reach 20 percent equity or refinance.
VA loans (for military members and veterans) and USDA loans (for rural properties) can allow zero down payment, but you must meet specific may be able to access requirements. If you are not may be able to access for either, FHA or conventional loans are your main options as a first-time buyer.
What mortgage insurance costs and how long you pay it
Mortgage insurance is not optional if you put down less than 20 percent — it is a requirement of the loan. On a $300,000 house with a $15,000 down payment (5 percent), your loan amount is $285,000. Mortgage insurance on that loan typically runs between 0.5 and 1.86 percent of the loan amount per year, depending on your credit score, the size of your down payment, and the loan type.
That means you could pay $1,425 to $5,301 per year in mortgage insurance — roughly $120 to $440 per month — added to your regular mortgage payment. With an FHA loan, you pay mortgage insurance for the entire 30-year loan term. With a conventional loan, you can remove PMI once you reach 20 percent equity (usually after 5 to 7 years of payments, depending on your down payment and home appreciation).
The lower your down payment, the higher your mortgage insurance rate. A 3 percent down payment costs more in insurance than a 10 percent down payment. If you can save an extra $5,000 to $10,000 before buying, it often lowers your monthly insurance cost enough to make the wait worthwhile.
Down payment assistance programs for first-time buyers
Many states, counties, and nonprofits offer down payment help for first-time buyers. These programs vary widely — some cover the full down payment, some cover a portion, and some offer forgivable loans (money you do not have to repay if you stay in the house for a set number of years).
Common sources include your state housing finance agency, your county or city housing department, and nonprofits like NeighborWorks America. Some programs have income limits; others prioritize buyers in certain neighborhoods or with lower credit scores. A few programs stack, meaning you can combine them — for example, using a state grant for part of your down payment and a nonprofit loan for the rest.
The fastest way to find what exists in your area is to contact your state housing finance agency directly or search the HUD website for local programs. Many programs have waiting lists or limited funding, so starting your search early matters. Some programs also offer free homebuying classes, which can lower your interest rate by 0.25 to 0.5 percent.
How your credit score and debt affect your down payment options
Lenders use your credit score to decide whether to approve you and what interest rate to offer. A higher credit score opens more loan options and often means a lower down payment requirement. If your score is 620 to 639, you may only may have access to for FHA loans with 10 percent down. If your score is 640 to 679, you have more conventional options at 5 to 10 percent down. If your score is 680 or higher, you can access the full range of conventional loans at 3 to 5 percent down.
Your debt-to-income ratio — the percentage of your monthly income that goes to debt payments — also matters. Most lenders want this ratio to be 43 percent or lower. If you earn $5,000 per month and already pay $1,500 in car loans, credit cards, and student loans, your new mortgage payment cannot exceed $1,650 (43 percent of $5,000 minus existing debt). On a $300,000 house with a low down payment, your mortgage payment will be high, which can push your ratio over the limit.
If your ratio is too high, you have two choices: pay a larger down payment to lower your loan amount and monthly payment, or wait and pay down existing debt first. Paying off a car loan or credit card before applying can free up enough monthly income to may have access to for the loan you want.
Closing costs and reserves beyond the down payment
Your down payment is separate from closing costs — the fees you pay to the lender, title company, and other parties to complete the purchase. Closing costs typically run 2 to 5 percent of the purchase price, or $6,000 to $15,000 on a $300,000 house. These costs include the loan origination fee, appraisal, title insurance, property taxes, and homeowners insurance.
Lenders also want to see that you have cash reserves after closing — usually two to three months of mortgage payments in savings. On a $300,000 house with a low down payment, your mortgage payment (including insurance and taxes) might be $2,000 to $2,500 per month. Lenders want to see $4,000 to $7,500 in reserves, separate from your down payment and closing costs.
This means your total cash need is down payment plus closing costs plus reserves. For a $300,000 house with a 5 percent down payment, you need roughly $9,000 (down payment) plus $9,000 to $15,000 (closing costs) plus $4,000 to $7,500 (reserves) — a total of $22,000 to $31,500 before you can close. Some lenders are flexible on reserves if you have a strong credit score and income, but most require them.
Comparing 3 percent versus 10 percent down on a $300,000 house
| Down Payment | Amount | Loan Amount | Monthly PMI/MIP | Total Monthly Payment (est.) |
|---|---|---|---|---|
| 3% | $9,000 | $291,000 | $240–$450 | $2,100–$2,400 |
| 10% | $30,000 | $270,000 | $135–$250 | $1,950–$2,200 |
| 20% | $60,000 | $240,000 | $0 | $1,700–$1,950 |
These estimates assume a 7 percent interest rate and 30-year loan. Actual payments vary based on your credit score, the exact interest rate you receive, local property taxes, and homeowners insurance costs. The 3 percent option requires less upfront cash but costs more per month. The 10 percent option is a middle ground. The 20 percent option eliminates mortgage insurance but requires significantly more savings.
For most first-time buyers, the 5 to 10 percent range makes sense — it balances the cash you need upfront with the monthly payment you can afford. If you can save an extra $10,000 to $15,000, moving from 5 to 10 percent usually saves $100 to $200 per month in insurance costs, which adds up over time.
Frequently Asked Questions
Can I borrow my down payment from family or a friend?
Yes, but the lender needs to know about it. If the money is a gift, the lender requires a signed gift letter stating that repayment is not expected. If it is a loan, you must disclose it as a debt, which affects your debt-to-income ratio and may disqualify you. Most lenders prefer gifts over loans for this reason.
What if I only have $5,000 saved for a $300,000 house?
You can still buy with an FHA loan (3.5 percent down is $10,500) or a conventional loan (3 percent down is $9,000) if your credit and income may have access to. You would need to save more or use a down payment assistance program. Alternatively, you could look at less expensive homes where your $5,000 represents a larger percentage of the purchase price.
Does putting down more than 20 percent help my interest rate?
Slightly. A larger down payment shows the lender you are less risky, which can lower your interest rate by 0.125 to 0.25 percent. However, the difference is small — you may save $30 to $60 per month on a $300,000 loan. Whether it is worth delaying your purchase to save more depends on your local market and how fast home prices are rising.
Can I use my 401(k) or IRA for a down payment?
Yes, but with penalties. A traditional IRA allows you to withdraw up to $10,000 penalty-free as a first-time buyer (lifetime limit). A 401(k) allows loans against your balance, though you must repay them or face taxes and penalties. Withdrawing from retirement savings early costs you decades of compound growth, so this is usually a last resort.
What happens if I put down less than 3 percent?
Most lenders do not offer conventional loans below 3 percent down. FHA loans go as low as 3.5 percent. If you have less saved, you would need a down payment assistance program, a gift from family, or to wait and save more. Some lenders have portfolio programs (loans they keep rather than sell) that allow 1 to 2 percent down, but these are rare and carry higher interest rates.