Conventional Loan Minimum Down Payment Explained

A conventional loan can require as little as 3% down for some qualifying homebuyers and loan programs, while other conventional loans require more. This calculator estimates the down payment and remaining loan amount from a home price and a down-payment percentage; actual lender requirements vary.

Formula

Down payment = home price × down-payment percentage ÷ 100. Amount financed before other costs = home price − down payment. In these formulas, price is the purchase price in dollars, pct is the down-payment percentage, down is the resulting amount in dollars, and loan is the purchase price remaining after the down payment, in dollars. The second result is not necessarily the final mortgage balance: financed costs, credits, or other transaction details are not included.

Worked Example

Using the calculator’s defaults—a $300,000 home price and a 3% down payment:

1. Convert 3% to a decimal: 3 ÷ 100 = 0.03.
2. Multiply the price by the percentage: $300,000 × 0.03 = $9,000 down.
3. Subtract the down payment: $300,000 − $9,000 = $291,000 remaining to finance before other costs.

Assumptions

• The percentage applies to the full home purchase price.
• This is a one-time down-payment calculation, not a loan-payment or interest calculation.
• No fees, taxes, insurance, PMI, escrow, closing costs, or other adjustments are included.

What Is the Conventional Loan Minimum?

There is no single down-payment minimum for every conventional mortgage. Some conventional options permit a down payment as low as 3% for eligible borrowers and qualifying transactions. Other loans, including some loans for second homes, investment properties, or higher-priced purchases, may require a larger percentage. A lender’s underwriting requirements and the loan’s specific terms also matter.

“Conventional” generally means a mortgage that is not insured or guaranteed by a government agency. Many conventional mortgages conform to standards used in the broader mortgage market, but the word does not itself promise a particular down payment. A 3% figure is a possible minimum in certain circumstances, not a universal entitlement or an approval guarantee. Ask the lender which minimum applies to the exact property, occupancy, borrower, and loan structure.

How a Smaller Down Payment Affects the Loan

A lower down payment means a larger amount remains to be financed, all else equal. In the example, putting down 3% leaves $291,000 of the $300,000 price before any adjustments. Putting down 5% on that same price would mean $15,000 down and $285,000 remaining. These figures describe the arithmetic only; they do not predict approval, monthly payments, or total borrowing costs.

Down payment is also different from cash needed at closing. Buyers may have other transaction expenses, and the amount due can be affected by credits, deposits already paid, and the way costs are handled. The calculator does not estimate those items. A lender’s loan estimate and other transaction documents provide figures for the specific application; request a breakdown rather than treating the down payment as the entire cash requirement.

• Down payment: The portion of the purchase price paid up front by the buyer.
• Amount financed: A basic estimate of the price left after that payment, before other costs or adjustments.
• Closing cash: The total amount required at closing, which can include items beyond the down payment.

PMI, Equity, and Costs to Check

Private mortgage insurance (PMI) is commonly associated with conventional loans that have less than 20% down, but the precise requirement, cost, and cancellation terms depend on the loan and applicable rules. Do not assume every loan below 20% has identical PMI, or that reaching a particular equity level automatically removes it. Ask the lender whether PMI applies, how its cost is calculated, and what conditions govern changes to coverage.

A larger down payment reduces the amount borrowed for the same purchase price, but it also uses more cash up front. To compare scenarios, change the percentage in the calculator and note how both outputs change. Then obtain lender-specific estimates for payment, insurance, fees, and other costs. This page does not calculate interest, property taxes, homeowners insurance, or monthly mortgage insurance.

Choosing a Down-Payment Percentage

Use the calculator to model percentages rather than treating the smallest possible down payment as the right amount for every buyer. For example, compare 3%, 5%, 10%, and 20% on the same purchase price. The result shows the cash represented by each percentage and the remaining purchase price to finance; it cannot determine which amount is suitable for a particular budget or transaction.

For a useful comparison, ask a lender to show the complete costs for each scenario and clarify whether the loan has PMI or other conditions that change with the down payment. Confirm which funds count toward the down payment, what is due at closing, and whether any deposits or credits have been included. Loan limits and eligibility requirements can differ by transaction and location; verify the applicable figures with the lender rather than relying on a general percentage.

Frequently Asked Questions

Can you get a conventional loan with 3% down?
Some conventional loan options allow 3% down for qualifying borrowers and transactions. Eligibility and property requirements vary, so confirm the applicable minimum with the lender.

Is 20% down required for a conventional loan?
No. Some conventional loans allow less than 20% down. A smaller down payment may affect mortgage insurance and other loan terms; ask the lender how the specific loan works.

Does a 3% down payment include closing costs?
No. The calculator applies the percentage to the home price only. Closing costs and other amounts due are separate and are not calculated here.

How much is 3% down on a $300,000 house?
Three percent of $300,000 is $9,000. That leaves $291,000 of the purchase price before other costs or adjustments.

Does a low down payment guarantee approval?
No. A down-payment percentage alone does not establish eligibility or approval. Lenders assess the full application and transaction under the requirements for the loan.

This result is an estimate; the lender’s disclosure gives the exact figures.

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in price | Home price | $ | 300000 | 1 | 100000000
in pct | Down payment | % | 3 | 0.01 | 100
out down | Down payment amount | $ | price * pct / 100 | 2
out loan | Amount financed before other costs | $ | price - down | 2