What you really need at closing
The down payment is only part of the cash a buyer needs. Closing costs, which cover lender fees, title insurance, appraisal, taxes and prepaid items, typically add around 2% to 5% of the price in the US. On a $400,000 home with 20% down and 3% closing costs, the total comes to $92,000. Moving costs and a small cushion for the first repairs are worth planning on top of that.
Twenty percent down is the traditional target because it avoids private mortgage insurance on a conventional loan and lowers the monthly payment. It is not a requirement, though. Conventional loans can go as low as 3% down, FHA loans 3.5%, and VA and USDA loans can be zero down for those who qualify. The bars compare how long each option takes to save.
Speeding up the timeline
Because house goals are usually two to five years away, the money is best kept somewhere safe that still earns interest, such as a high-yield savings account, CDs or Treasury bills. Investing a down payment in stocks can backfire if the market drops the year you want to buy.
Beyond saving more, look into first-time buyer assistance programs run by states and cities, which can offer grants or low-interest second loans toward the down payment. Some employers and family gifts can also be used, with paperwork the lender will ask for.
Common questions
How much should I save for a $300,000 house?
For 20% down plus about 3% closing costs, around $69,000. With 5% down it is $15,000 plus roughly $9,000 of closing costs.
Do I need 20% down?
No. Many loans allow 3% to 5% down, but under 20% on a conventional loan you will usually pay mortgage insurance until you reach about 20% equity.
What are closing costs?
Fees for the loan, title, appraisal, recording and prepaid taxes and insurance. In the US they commonly total 2% to 5% of the purchase price.
This calculator gives estimates for planning. Real returns, rates and prices change, so treat the result as a guide rather than a promise. Read how we build and check our calculators.