How Much Is the Down Payment for a $500,000 House? (2024)

What’s the minimum down payment needed for a $500K house? It could be anything between $0 and $100,000. Don’t worry about the vagueness. By the time you’ve read this article, you’ll have a good idea of how much you will need.

Check your low down payment eligibility. Start here

In this article (skip to...)

  • Intro to down payments
  • Minimum down payment amounts
  • Down payment assistance programs
  • Monthly payment for a $500K house
  • Home affordability FAQ

Introduction to down payments

A down payment is the sum of money you contribute from your savings or other sources to the purchase price of a home you’re buying.

It’s usually expressed as a percentage of the purchase price. So, if your mortgage requires that you put down, say, 3%, the down payment needed for a $500K house would be $500,000 x 3% = $15,000. And a 20% down payment would require $100,000 ($500,000 x 20% = $100,000).

You may be able to do those calculations in your head or using a calculator. But, if you ever encounter difficulty with math, you always can ask Alexa, Siri, or a similar cloud-based voice service to assist you.

Check your low down payment eligibility. Start here

“Other sources”

We mentioned that a down payment is “money you contribute from your savings or other sources.” So, what might those others be?

Well, one could be a gift from a family member, friend or partner. Just be aware that any such gift must be properly documented so the lender knows where the money came from and is sure that it truly is a gift, not a loan in disguise. If you’re eligible for one of Freddie Mac’s mortgage loans, you may also be able to use funds given as wedding gifts, but again, you’ll have to document the sources and your marriage.

An even bigger source of down payment funds can be down payment assistance (DPA) programs. And there’s a whole section of these coming up later in this article.

Why most people need to make a down payment

Only two types of mortgages allow you to get a home loan without a down payment requirement. Again, we’ll be covering those in a minute.

Unless you’re eligible for one of those, your mortgage lender will insist on a down payment. Why?

Well, years of experience in the mortgage industry have shown that those with skin in the game are more likely to pay down their mortgages than those with no financial interest in the home. And the bigger that financial interest, the less likely a mortgage borrower is to walk away from his or her loan.

Similarly, the lender can avoid a loss if the loan turns bad and needs to be foreclosed. Your large down payment is a financial cushion for your mortgage lender.

So, lenders tend to reward those with down payments that are higher than the minimum. And you may well get a lower mortgage rate the more you put down.

That may be why the National Association of Realtors® reports that the typical down payment for first-time home buyers in 2022 was 6%. Yet it’s easy to find mortgages with minimum down payments of half that.

Down payment needed for a $500K house

The size of the down payment you need will depend on the type of mortgage you choose and your financial situation. Unfortunately, it’s a bit more complicated than that.

That’s because you can choose only mortgages for which you’re eligible. And eligibility hurdles are why everyone doesn’t opt for a mortgage with a 0% down payment.

So, let’s next dig into those homeownership eligibility hurdles and the minimum down payment for different types of mortgages.

Check your low down payment eligibility. Start here

What's the minimum amount you can put down?

Below are the different types of mortgages so you can see which you should pick and the down payment you might have to find for it:

VA loans

VA loans are available only to veterans, service members and those in related (and closely defined) groups. But, if you can get one, you’ll have a very competitive mortgage with these benefits:

  • Zero minimum down payment
  • Typically, very competitive mortgage rates compared to other 30-year home loans
  • No mortgage insurance. Just a single funding fee on closing
  • Include your closing costs in the home loan (VA refinance only)
  • Expect most mortgage lenders to want minimum credit scores of 620 or even 640

Your down payment for a $500K house with a VA loan can be $0.

Check your VA loan eligibility. Start here

USDA loan

USDA loans come via the U.S. Department of Agriculture (USDA), which partly guarantees them. They’re available only to people on moderate and low incomes who are buying in an area that the USDA counts as rural.

However, the USDA counts 97% of America’s landmass as rural, including some suburbs. So, look up the address of the home you want to buy on the USDA’s website to see if your next home might be eligible. Just don’t forget those income limits.

Here are the benefits of a USDA loan:

  • Zero down payment
  • Below-market mortgage rates
  • Reduced-rate mortgage insurance premiums
  • No pre-set credit score but expect lenders to require 620 or higher

Your down payment for a $500K house with a USDA loan can be $0.

Verify your USDA loan eligibility. Start here

Conforming loans

Conforming loans count as types of conventional loans. But we have to treat them separately here because they have very different down payment (and other) requirements.

Why are they called conforming loans? Because they conform to rules and regulations laid down by Fannie Mae and Freddie Mac. Expect:

  • A minimum down payment of 3%
  • Competitive interest rates rather than very low ones
  • A mortgage insurance requirement. However, you can request PMI removal when you have 20% equity.
  • A minimum credit score of 620

Your minimum down payment needed for a $500K house with a conforming loan can be $15,000.

FHA loans

FHA loans are partly guaranteed by the Federal Housing Administration (FHA). Expect:

  • A minimum down payment of 3.5%
  • Lower mortgage rates than some other loans
  • However, high mortgage insurance premiums can make them more costly overall.
  • Worse, you’ll have to pay private mortgage insurance for the lifetime of your home loan. You must finish paying down your mortgage, sell the home, or refinance the loan to escape it. However, there’s one caveat to this. If you put 10% down on an FHA loan, it’s possible for your mortgage insurance to drop after 11 years of on-time payments
  • A minimum credit score of 580. But that can be as low as 500 if you have a 10% down payment

Your minimum down payment needed for a $500K house with an FHA loan can be $17,500.

Begin your FHA loan application process. Start here

Conventional mortgages

A conventional loan is one that isn’t backed by the federal government. Conforming loans are considered conventional loans but have different requirements for borrowers. They’re a subset. So, we covered those separately earlier in this list.

A true conventional mortgage has the following characteristics:

  • 20% minimum down payment
  • Lower mortgage rates than many mortgages
  • No mortgage insurance
  • Expect to need a minimum credit score of 620+

Your minimum down payment for a $500K house should be $100,000. But check out piggyback loans, which can sometimes get you a conventional loan for half that.

Check your conventional loan eligibility. Start here

Should I put 20% down on a $500,000 house?

Putting down 20% on a house brings many benefits. Indeed, putting down the biggest down payment you can manage is usually a good idea.

Just don’t overstretch yourself financially. Most borrowers want to live comfortably as homeowners. But, of course, it’s up to you if you’re happy to live on a PBJ diet for a few years to reap the benefits of a high down payment.

So, what are the advantages of high down payments? Well, we already mentioned that you’ll often be in line for a lower mortgage rate.

But you’ll also get a lower monthly payment. And your total cost of borrowing to buy your new home will be considerably a smaller amount of money.

This isn’t magic. It’s because you’re borrowing (and paying interest on) less. Suppose you put down a significant chunk (20%) of the down payment needed for a $500K house. You’ll be borrowing $400,000. But if you make a 3% down payment, you’ll be borrowing $485,000.

That $85,000 difference will make your mortgage much more expensive if you’re paying 7% or 8% (or whatever the mortgage rate you can get when you buy) for 30 years.

Down payment assistance programs

We mentioned down payment assistance earlier and promised to explore it further. And here we are.

Some 2,000 DPA programs operate in the United States, mostly covering local areas. Many are operated by state, county, or city governments.

Check your low down payment eligibility. Start here

Each gets to set its own eligibility criteria and decide what benefits to offer. So we can’t tell you what you might get. But programs commonly offer home buyers one or more of the following:

  1. Outright grants — These never have to be repaid
  2. Low-interest loans — Repay these in parallel with your primary mortgage
  3. Forgivable silent loans — You make no monthly payments and pay no interest. And, after a certain number of years, your mortgage lender forgives your loan, providing you’re still in residence

It’s well worth checking out whether you’re eligible for help where you plan to buy and establishing what assistance you might receive. To make a start, read .

And don’t forget other help you might be in line for. Seller concessions mean you might be able to get your seller to cover some or all of your closing costs. And some sellers are even willing to pay to buy down your mortgage rate for one or more years.

Will yours? It depends on how badly your seller needs your purchase to proceed.

What’s the monthly payment for a $500K house?

There’s no single answer to what the monthly payment on a $500,000 home will be. There are too many variables, including type of mortgage, size of down payment, mortgage rate when you apply, and how attractive a borrower you are to mortgage lenders.

Check your low down payment eligibility. Start here

But luckily, there’s an easy way to find out. And that’s by using our free mortgage calculators. Click Tools at the top of our home page to find an array, including a general one and others for FHA, VA, and USDA loans.

Pick the calculator you want and then fill in the different fields: home price, down payment, the ruling mortgage rate, mortgage term (usually 30 years), and the state in which you’re buying. So, you can model different scenarios.

We did that for a $500,000 Floridian home with a 30-year fixed-rate mortgage with a 20% down payment. On the day we were checking, the average rate for one of these loans was 6.75% but check to see what it is when you read this. That returned a monthly mortgage payment of $2,594, plus property taxes and homeowners insurance.

The comparable figure for an FHA loan with a 3.5% down payment and a then-current mortgage rate of 6.616% was $3,087 plus $229 mortgage insurance each month, making $3,316.

You can see how much difference the smaller down payment and the mortgage insurance can make.

Time to make a move? Let us find the right mortgage for you

Home affordability FAQ

How much is the down payment for a $500K house?

You’ll need a down payment of $15,000, or 3 percent, if you’re buying a $500K house with a conventional loan. Meanwhile, an FHA loan requires a slightly higher down payment of $17,500, equivalent to 3.5 percent of the home’s purchase price. Home buyers using either a VA or USDA loan can qualify for a mortgage with zero down payment on a $500K home.

How much income do I need to afford a $500K home?

You’ll likely need to make about $138,000 a year to buy a $500K house. This is an estimate, but, as a rule of thumb, with a 3 percent down payment on a conventional 30-year mortgage at 7 percent, your monthly mortgage payment will be around $3,200. Keep in mind this figure doesn’t include home insurance or housing expenses. Also, your home buying budget will vary depending on your credit score, debt-to-income ratio, type of loan, mortgage term, and interest rate.

How much would a $500K home cost a month?

A $500K home with 3 percent down at a 7% interest rate for 30 years would cost approximately $3,200 per month. Keep in mind that this is an estimate, and your actual monthly payment may vary depending on your specific loan terms and any additional costs, such as property taxes and insurance.

Can I afford a $500K house if I make $100K a year?

If you’re looking to make a minimum down payment of 3%, you’ll likely need to make more than $100K per year to afford a $500K home. However, if you can manage to put down at least 20%, it’s possible that you could afford a $500,000 home on a $100,000 annual income. But it will depend on the level of other debts you already have. If you’re burdened with high card balances and large auto, personal, and student loans, you may have to lower your sights or find a co-borrower.

How Much Is the Down Payment for a $500,000 House? (2024)

FAQs

How Much Is the Down Payment for a $500,000 House? ›

Conforming Loan Down Payment – $500k House

How much should I put down on a $500,000 house? ›

Introduction to down payments

So, if your mortgage requires that you put down, say, 3%, the down payment needed for a $500K house would be $500,000 x 3% = $15,000. And a 20% down payment would require $100,000 ($500,000 x 20% = $100,000). You may be able to do those calculations in your head or using a calculator.

How much money do you need to make to afford a $500,000 house? ›

In today's climate, the income required to purchase a $500,000 home varies greatly based on personal finances, down payment amount, and interest rate. However, assuming a market rate of 7% and a 10% down payment, your household income would need to be about $128,000 to afford a $500,000 home.

What credit score is needed for a $500,000 house? ›

Most mortgages, including conventional loans, require a credit score of 620 or higher. It's possible to get an FHA loan with a credit score as low as 500, but many lenders require higher scores.

How much monthly payment for a 500K house? ›

As noted above, your estimated monthly payment for a $500K mortgage will be $3,360.16, assuming a 30-year loan term and an interest rate of 7.1%. But this payment could range between $2,600 and $4,900 depending on your term and interest rate.

Can I afford a 500k house on 100k salary? ›

To afford a $500,000 house, you need to make a minimum of $91,008 a year — and probably more to make sure you're not house-poor and can afford day-to-day expenses, maintenance and other debt, like student loans or car payments. One good guideline to follow is not to spend more than 28 percent of your income on housing.

How much salary to afford a 600k house? ›

The principal, interest and property mortgage insurance on $600,000 house with a 15% down payment and a 30-year, fixed-rate mortgage with 7% rate would cost $3,662. To afford this, you would need a monthly income of about $13,079 or an annual income of about $157,000.

What income is needed for a $400,000 mortgage? ›

Your payment should not be more than 28%. of your total gross monthly income. That means you'll need to make 11,500 dollars a month, or 138 k per year. in order to comfortably afford this 400,000 dollar home.

How much house can I afford if I make $70,000 a year? ›

One rule of thumb is that the cost of your home should not exceed three times your income. On a salary of $70k, that would be $210,000. This is only one way to estimate your budget, however, and it assumes that you don't have a lot of other debts.

How much income to afford a 400k house? ›

To afford a $400,000 home, assuming a 20% down payment and a 6.5% interest rate on a 30-year mortgage, you would need a gross monthly income of approximately $7,786.55. This assumes you have $1,000 in monthly debt.

What credit score is needed to buy a house with no money down? ›

You'll usually need a credit score of at least 640 for the zero-down USDA loan program. VA loans with no money down usually require a minimum credit score of 580 to 620. Low-down-payment mortgages, including conforming loans and FHA loans, also require FICO scores of 580 to 620.

How much can I borrow with a 580 credit score? ›

You can borrow anywhere from a few thousand dollars to $100,000+ with a 580 credit score. The exact amount of money you will get depends on other factors besides your credit score, such as your income, your employment status, the type of loan you get, and even the lender.

What is a good credit score by age? ›

How Credit Scores Breakdown by Generation
Average FICO 8 Score by Generation
Generation20222023
Generation Z (ages 18-26)679 - Good680 - Good
Millennials (27-42)687 - Good690 - Good
Generation X (43-58)707 - Good709 - Good
2 more rows

Can I afford a 500k house if I make 200k? ›

A mortgage on 200k salary, using the 2.5 rule, means you could afford $500,000 ($200,00 x 2.5). With a 4.5 percent interest rate and a 30-year term, your monthly payment would be $2533 and you'd pay $912,034 over the life of the mortgage due to interest.

How long does it take to pay off a $500,000 mortgage? ›

Compare Repayments on $500,000 Mortgages

A 30 year mortgage at 2.32% should cost you $1,929 principal and interest repayments per month, with $194,387 in total interest. A 30 year mortgage at 2.66% should cost you $2,017 principal and interest repayments per month, with $226,281 in total interest.

How much house can I afford with $10,000 down? ›

If you have a conventional loan, $800 in monthly debt obligations and a $10,000 down payment, you can afford a home that's around $250,000 in today's interest rate environment.

How much house can I afford with a 60k salary? ›

The 28/36 rule holds that if you earn $60k and don't pay too much to cover your debt each month, you can afford housing expenses of $1,400 a month. Another rule of thumb suggests you could afford a home worth $180,000, or three times your salary.

What income do you need for a 400k mortgage? ›

Your payment should not be more than 28%. of your total gross monthly income. That means you'll need to make 11,500 dollars a month, or 138 k per year. in order to comfortably afford this 400,000 dollar home.

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