The basic math
Down payment equals price times the percentage. The loan equals price minus the down payment. On a $300,000 purchase, 3% down is $9,000 and a $291,000 loan. 5% down is $15,000 and a $285,000 loan. 10% down is $30,000 and a $270,000 loan. 20% down is $60,000 and a $240,000 loan.
What a bigger down payment changes
Borrowing less lowers your monthly payment and the interest you pay over the loan. The gap between 3% and 20% on this example is $51,000 of borrowed money, and interest is charged on every dollar of it for as long as you owe it.
Lender rules also depend on the percentage. Some loan programs set minimums, and a smaller down payment can bring extra monthly costs such as mortgage insurance. Those rules vary by loan type and lender, so ask for the current terms.
What a bigger down payment costs you
Cash you put down is cash you cannot use elsewhere. Emptying savings for a down payment can leave you without a cushion for repairs, moving costs or a gap in income. Many people keep a reserve rather than putting every dollar into the purchase.
Do not forget the other up-front costs
The down payment is separate from closing costs, moving expenses, furniture and initial repairs. Add those to your savings target so the total is realistic.
Try the calculator
Run your own numbers in the free down payment calculator. It works in your browser and nothing you enter is saved or sent.
Sources
Common questions
Is 20% required?
No. It is a common benchmark, not a universal rule. Required minimums depend on the loan program and lender.
Does the down payment include closing costs?
No. They are separate.
Can gifts count toward a down payment?
Some programs allow it with documentation. Ask the lender for its rules.
This guide is general information, not financial, tax or legal advice. Rates, fees and rules change, so confirm current terms with the lender, store or agency involved. All dollar figures are invented examples.