How does my down payment amount affect my mortgage?
Short answer
The down payment you need depends on the loan type and the lender's requirements. A larger down payment generally can mean a lower interest rate and a higher chance of approval. On a conventional loan, a down payment under 20 percent commonly involves private mortgage insurance; government-backed programs can use different down-payment and insurance or guarantee rules.
Full explanation
Down-payment requirements vary by the loan you choose and by lender. The CFPB says that, generally, a larger can lead to a lower interest rate and make approval more likely. That is a tendency, not a promise that any particular amount will be approved.
On a conventional loan, putting down less than 20 percent commonly means . FHA, VA, and USDA programs can permit different down-payment structures and have their own insurance, guarantee, or fee rules. Those programs are options some borrowers may use; they are not something a lender requires simply because the down payment is below 20 percent.
The down payment is not the only cash you may need. The CFPB advises factoring in points if you choose to buy a lower rate, closing costs, moving costs, and immediate repairs. When you shop, ask how each down-payment amount would affect the rate and which loan types are available for that amount.