Down Payment

Banking & Credit

A down payment is the upfront cash you pay toward a home purchase, expressed as a percentage of the purchase price. Conventional loans require 3-20%; FHA loans accept 3.5%; VA loans (for veterans) and USDA loans (rural) accept 0%. Putting down 20% eliminates Private Mortgage Insurance (PMI), which adds $30-$70 monthly per $100K of loan balance. A $400,000 home needs $80,000 down to avoid PMI. The trade-off: a smaller down payment means more cash for emergency fund and investing, often outperforming PMI cost over time. Run the math both ways.