How to Figure Out Your Down Payment on a House

Start With Your Loan Type, Not the 20% Rule

The single most common mistake buyers make is treating 20% as a requirement. It is not, and it has not been for years. That figure dates back to an era before widespread mortgage insurance programs existed. The 2024 NAR Profile of Home Buyers and Sellers shows the median first-time buyer put down 9%. Across all buyers, the median was 18% - still under the supposed rule.

The real starting point is the minimum for your loan type:

- Conventional: 3% minimum

- FHA: 3.5% with a credit score of 580 or higher, 10% with a score of 500-579

- VA: 0%

- USDA: 0%

- Jumbo: typically 10-20%

Once you know your floor, the question stops being "can I afford 20%?" and becomes "how much above the minimum makes sense for my monthly budget and my savings cushion?" That is a math problem, and the numbers below answer it.

The Real Math: PMI, Interest Rates, and a $400,000 Example

Putting down less than 20% on a conventional loan means private mortgage insurance. PMI typically runs 0.2% to 2% of your loan amount annually. On a $350,000 home with 3% down, that works out to roughly $140-$280 per month. The good news: conventional PMI cancels automatically once you hit 22% equity. FHA is stricter - put down less than 10% and the mortgage insurance lasts the life of the loan.

A larger down payment also buys a better rate. Freddie Mac research shows borrowers with 20% or more down have historically received rates roughly 0.125-0.25% lower.

Here is what it adds up to on a $400,000 home: the 20% down scenario costs roughly $145,000 less over 30 years than 5% down - a $60,000 difference in the down payment itself plus about $76,720 less in total interest.

So why would anyone put down less? Liquidity. A smaller down payment keeps your emergency fund intact, gets you into a home years sooner, and leaves money available for repairs and moving costs. Neither answer is wrong. The right down payment is the one that fits both your monthly payment target and the reserves you refuse to drain.

What This Means When You're Selling a Florida Home

If you are on the selling side, this math changes how you should read offers. A buyer bringing 3.5% down on an FHA loan is not a weak buyer - they are the statistical norm. NAR's data says the median first-time buyer puts down 9%. What actually determines whether a financed buyer closes is whether their financing has been vetted: pre-underwriting, appraisal expectations, and a lender who has already seen their file.

That vetting step is where Cash Flow Deals fits. CFD is a Florida real estate investor that connects homeowners directly to vetted FHA, conventional, VA, and DSCR buyers through a novation agreement, so the buyer pool you reach has already had its financing checked before an offer ever lands on your table. Listing-side details run through Silver Door Realty, a licensed Florida brokerage. Instead of guessing whether a low-down-payment buyer will make it to closing, you start with buyers whose loan structure has been reviewed up front. If you own a Florida house and want to see what that buyer pool looks like for your property, start with your Florida selling options.

Cash Flow Deals is a Florida real estate investor that locks in a net price for a seller's house before repairs are scoped, using a novation-based, flat-fee process arranged through its licensed FL brokerage partner, Silver Door Realty — not a traditional listing, and not a brokerage itself.

Here's how Cash Flow Deals turns that vetted-buyer pool into a locked-in number for your home:

1. Share your address and basic property details with Cash Flow Deals and get a real net price back within 24 hours, without waiting on any buyer's loan approval to know your number.

2. Review that price against your mortgage payoff and moving timeline, with no repair list to negotiate and no financing contingency hanging over the contract.

3. Close on your own schedule, in as little as 10 business days, through the same novation structure that already vetted the buyer's financing long before your offer was ever presented.