How Much Down Payment You Need for a $300,000 House

What You Need to Put Down on a $300,000 House

On a $300,000 house, your down payment will be somewhere between $6,000 and $90,000, depending on the type of loan you get and what the lender requires. The most common down payments are 3%, 5%, 10%, 15%, or 20% of the purchase price. At 3%, you'd put down $9,000. At 20%, you'd put down $60,000. The lower your down payment, the higher your monthly mortgage payment and the more interest you'll pay over the life of the loan—but you also need less cash upfront right now.

The lender decides the minimum down payment based on the loan program. A conventional loan (the kind most people get from a bank) typically requires at least 3% down, though some lenders want 5% or more. FHA loans, backed by the Federal Housing Administration, allow down payments as low as 3.5%. VA loans, for military members and veterans, often allow 0% down. USDA loans, for rural properties, also allow 0% down for borrowers who meet income limits. Your credit score, income, and debt also affect what a lender will accept.

Key Takeaways

• A 3% down payment on a $300,000 house is $9,000; a 20% down payment is $60,000.
• Conventional loans usually require 3% to 5% down, while FHA loans allow 3.5%, and VA or USDA loans may allow 0% down.
• The lower your down payment, the more you pay in interest and the higher your monthly payment, but you need less cash today.
• If you put down less than 20%, you'll pay mortgage insurance (PMI) each month until you build enough equity.
• Down payment assistance programs exist through nonprofits, state housing agencies, and some employers, though they vary by location and income.

How Down Payment Percentage Affects Your Monthly Payment

The down payment you choose directly changes what you owe each month. On a $300,000 house with a 30-year mortgage at a typical interest rate, putting 3% down ($9,000) means you borrow $291,000. Putting 20% down ($60,000) means you borrow $240,000. The difference in principal alone is $51,000, which translates to roughly $200 to $250 more per month in mortgage payments when you put down only 3%.

That gap widens when you add mortgage insurance. If you put down less than 20%, the lender requires you to pay private mortgage insurance (PMI). On a $300,000 house with 5% down, PMI typically runs $150 to $250 per month, depending on your credit score and the lender. With 3% down, it can be $200 to $300 per month. You pay PMI until you own at least 20% of the home's value—which takes years of payments and any home appreciation. Once you hit 20% equity, you can request that the lender remove it, but you have to ask; most lenders do not remove it automatically.

Down Payment Assistance Programs and Where to Find Them

If you do not have $9,000 to $60,000 saved, several sources can help cover part or all of your down payment. State housing finance agencies run programs in every state; these often offer down payment grants or low-interest loans. The National Housing Trust Fund, administered through state agencies, provides down payment help to low-income buyers. Nonprofits like NeighborWorks America and local community development corporations also offer down payment grants, though availability and amounts vary widely by location.

Some employers offer down payment assistance as an employee benefit, especially larger companies and government agencies. Credit unions sometimes have down payment programs for members. The federal government does not run a single down payment program, but it backs FHA and USDA loans, which allow lower down payments than conventional loans. To find what exists in your area, contact your state housing finance agency directly or search the HUD website for local resources. Many programs have income limits and require you to complete a homebuyer education course before you receive funds.

Conventional Loans Versus FHA, VA, and USDA Loans

A conventional loan is a mortgage from a private lender that is not backed by the government. It typically requires 3% to 5% down on a $300,000 house, though some lenders ask for more. You'll pay PMI if you put down less than 20%. Conventional loans usually have stricter credit score requirements (often 620 or higher) and require documented income and employment history.

An FHA loan is backed by the Federal Housing Administration and allows down payments as low as 3.5%, which would be $10,500 on a $300,000 house. FHA loans accept lower credit scores (sometimes 580 or higher) and are easier to get if you have recent credit problems or limited savings. The trade-off is that FHA loans require mortgage insurance for the life of the loan, not just until you reach 20% equity. On a $300,000 FHA loan with 3.5% down, mortgage insurance runs roughly $200 to $300 per month permanently.

A VA loan is available to military members, veterans, and surviving spouses. VA loans often allow 0% down, meaning you do not need to save a down payment at all. You do not pay PMI on a VA loan. A USDA loan is for rural properties and is available to borrowers with moderate incomes who meet location and property requirements. USDA loans also allow 0% down and do not require PMI, though they do charge a may provide fee rolled into the loan.

What Happens If You Cannot Save a Down Payment Right Now

If you do not have savings yet, you have several paths forward. First, check whether you may have access to for a VA or USDA loan, since both allow 0% down. If you do not, an FHA loan with 3.5% down ($10,500 on a $300,000 house) is the next lowest barrier. You can also look for down payment assistance in your state or through nonprofits; many programs cover the full 3% to 5% you need. Some programs combine a grant (money you do not repay) with a low-interest loan, so you put down a smaller amount yourself and the program covers the rest.

Another option is to buy a less expensive house now and move up later. A $200,000 house requires $6,000 to $40,000 down depending on the loan type—a smaller hurdle than $300,000. You build equity and improve your credit while you save for a larger home. You can also ask family members for a down payment gift; most lenders allow this as long as the gift is documented and the family member signs a statement saying it does not need to be repaid. Borrowing from a 401(k) or taking a personal loan are options too, though both carry costs and risks you should understand before you commit.

Closing Costs and Other Money You Need Beyond the Down Payment

The down payment is only part of the cash you need to buy a house. Closing costs—fees for the appraisal, title search, inspection, loan origination, and other services—typically run 2% to 5% of the purchase price. On a $300,000 house, that is $6,000 to $15,000. Some lenders allow you to roll closing costs into the loan, but that increases what you borrow and your monthly payment. Others require you to pay them upfront. A home inspection, which is separate from the appraisal, costs $300 to $500 and is strongly recommended even though it is not required.

You should also budget for a home appraisal ($400 to $600), a credit report ($30 to $75), and title insurance ($500 to $1,500). If the house is in a flood zone, flood insurance is required and can cost $500 to $2,000 per year. Property taxes and homeowners insurance are due at closing for the first month or two. Many buyers are surprised by the total cash needed; a realistic estimate is down payment plus 3% to 5% of the purchase price for closing costs, plus reserves for inspections and insurance. On a $300,000 house, plan for $15,000 to $30,000 in total cash before you make an offer.

How to Improve Your Chances of Getting Approved With a Lower Down Payment

Lenders are more willing to accept a lower down payment if you have a strong credit score, stable income, and low debt. A credit score above 740 opens doors to better interest rates and lower down payment requirements. If your score is below 620, many conventional lenders will not work with you; FHA loans are your better option. Pay down credit card balances and avoid opening new accounts in the months before you apply for a mortgage, since both actions improve your score.

Lenders also look at your debt-to-income ratio, which is the percentage of your gross monthly income that goes to debt payments. If you earn $5,000 per month and pay $1,000 in car loans, credit cards, and student loans, your ratio is 20%. Most lenders want this below 43%, though some go as high as 50%. If your ratio is too high, paying down debt before you apply makes a real difference. Having a co-signer with stronger credit or income can also help, though the co-signer is legally responsible for the loan if you cannot pay.

Frequently Asked Questions

Can I use a gift from family for my down payment?

Yes. Most lenders allow down payment gifts from family members as long as you provide a signed letter from the family member stating the money is a gift and does not need to be repaid. The lender will verify the gift came from the family member's own account, not from a loan. Some programs require the gift to come from a close relative—parent, grandparent, sibling, or spouse—but many do not.

What is the difference between PMI and mortgage insurance on an FHA loan?

PMI (private mortgage insurance) on a conventional loan stops once you reach 20% equity in the home. FHA mortgage insurance is permanent; you pay it for the life of the loan even after you own 50% of the home. This makes FHA loans more expensive over time, but they allow lower down payments and easier approval for buyers with weaker credit.

If I put down 10% instead of 3%, how much do I save over 30 years?

On a $300,000 house, 10% down is $30,000 and 3% down is $9,000. The $21,000 difference reduces your loan amount, which saves you roughly $40,000 to $60,000 in interest and PMI over 30 years, depending on interest rates. You also build equity faster and own the home sooner, but you need $21,000 more cash today.

Do I have to put down 20% to avoid PMI?

Yes, on a conventional loan. FHA loans do not have a 20% threshold; they require mortgage insurance regardless of down payment. VA and USDA loans do not require PMI at any down payment level. If you want to avoid PMI on a conventional loan, 20% down is the standard, though some lenders allow you to remove it at 15% or 18% equity if you have excellent credit.

What if the house appraises for less than the purchase price?

If the appraisal comes in lower than what you agreed to pay, the lender will only lend based on the lower value. If you agreed to pay $300,000 but it appraises for $280,000, the lender calculates your down payment as a percentage of $280,000, not $300,000. You either need to renegotiate the price with the seller, put down more cash to make up the difference, or walk away. This is why a home inspection and appraisal are critical before you commit.