How Much Down Payment Do You Need?

One of the biggest hurdles to buying a home is the deposit, so a key question for buyers is how much down payment you actually need. The answer shapes not just whether you can buy, but how much your monthly payments and total interest will be. The common benchmark is 20% of the price, though many buyers put down less. This guide explains the standard down payment range, why 20% is such a widely cited figure, and how the size of your deposit ripples through the rest of your mortgage. It also flags the extra costs to budget for. To see how a deposit changes your monthly payment, use our mortgage calculator. Figures use generic currency units.

Quick answer: A typical down payment is 10% to 20% of the home price. Putting down 20% usually lets you avoid extra mortgage insurance. On a 200,000 home, that is 20,000 to 40,000. Some loan programmes allow as little as 5% or less, but a larger deposit lowers your costs.

How much do you need?

Down payments typically range from about 5% to 20% of the purchase price, with 10% to 20% being common. The exact minimum depends on the country, the lender, and the type of loan. Some government-backed or first-time-buyer programmes allow very low deposits, occasionally under 5%, while a 20% deposit is the classic target.

Down payment = home price x deposit percentage

A worked example

Suppose you are buying a home priced at 200,000.

5% deposit: 200,000 x 0.05 = 10,000.
10% deposit: 200,000 x 0.10 = 20,000.
20% deposit: 200,000 x 0.20 = 40,000.

In plain English: on a 200,000 home, you might need anywhere from 10,000 to 40,000 upfront, depending on the deposit percentage. The larger the deposit, the smaller the loan you take on.

See the effect on your payment

Your deposit directly changes your loan size and monthly payment. Our mortgage calculator lets you test different deposits, and our guide on how much house you can afford ties it into your overall budget.

Why 20% is the benchmark

The 20% figure is widely cited for a practical reason: in many markets, putting down at least 20% lets you avoid private mortgage insurance (PMI) or a similar charge that lenders add when your deposit is smaller. That insurance protects the lender, not you, and adds to your monthly cost, so reaching 20% removes it.

A 20% deposit also signals lower risk to lenders, which can help you qualify and sometimes secure a better interest rate.

What a bigger deposit does

Smaller loan: you borrow less, so you owe less overall.
Lower monthly payment: a smaller loan means smaller repayments.
Less total interest: borrowing less saves interest over the whole term.
No mortgage insurance: reaching 20% typically removes that extra charge.
Better rates: lenders may offer lower interest for a bigger deposit.

Other upfront costs

The deposit is not the only cash you need at purchase. Budget also for closing or completion costs, legal and valuation fees, taxes or stamp duty where they apply, and moving expenses. These can add several percent of the purchase price on top of the deposit, so factor them in before deciding how large a deposit you can afford.

Frequently asked questions

How much down payment do I need for a house?

Typically 10% to 20% of the home price, though some loan programmes allow as little as 5% or less. On a 200,000 home, that is 20,000 to 40,000 for the common range. A 20% deposit usually lets you avoid mortgage insurance and can secure a better rate, but a smaller deposit still lets many buyers purchase.

Why is a 20% down payment recommended?

Because in many markets, putting down at least 20% lets you avoid private mortgage insurance, an extra charge lenders add on smaller deposits that protects them, not you. A 20% deposit also reduces your loan size, lowers your monthly payments and total interest, and can help you qualify for a better interest rate.

Can I buy a house with less than 20% down?

Yes. Many buyers put down 5% to 15%, and some government-backed or first-time-buyer schemes allow even less. The trade-off is a larger loan, higher monthly payments, more total interest, and usually mortgage insurance until you build enough equity. A smaller deposit makes buying possible sooner but costs more over time.

Does a bigger down payment lower my monthly payment?

Yes. A larger deposit means you borrow less, so your monthly repayment is smaller and you pay less interest over the life of the loan. Reaching 20% can also remove mortgage insurance and may earn a lower interest rate, reducing your monthly cost further. The trade-off is needing more cash upfront.

What other costs come with buying a home?

Beyond the deposit, budget for closing or completion costs, legal and valuation fees, taxes or stamp duty where applicable, and moving expenses. Together these can add several percent of the purchase price. It is important to account for them separately, so they do not leave you short after paying the deposit.

The bottom line

A down payment is usually 10% to 20% of the home price, so 20,000 to 40,000 on a 200,000 home, with some programmes allowing less. Aiming for 20% helps you avoid mortgage insurance and lowers your loan, monthly payments, total interest, and possibly your rate. Remember to budget for closing costs and fees on top. Test different deposits against your payment with our mortgage calculator.