Down payment for your primary residence Some lenders may require you to have a 5% down payment, while other lenders may only require 3%. If you have a credit score higher than 620 points, your lender can give you access to loan options with a lower down payment. For example, some loans insured by the Federal Housing Administration require both an initial mortgage insurance premium that is paid at closing and an annual mortgage insurance (MIP) premium for the life of the loan. There is no law or regulation that establishes a universal minimum down payment, but the more you pay up front, the lower your monthly mortgage payments, the lower the interest rate you'll be entitled to, and the less likely you are to have to pay mortgage insurance or other fees.
Ideally, you should deposit everything you can comfortably afford to pay to increase your chances of approval, possibly avoid mortgage insurance and have a more affordable monthly mortgage payment. This is because those who apply for a mortgage with higher down payments are more likely to receive approval from mortgage lenders and, therefore, are more likely to have the house sold. This is an additional monthly expense that you'll have to pay along with your mortgage payment, and it generally costs between 0.5% and 1% of the mortgage amount each year, but it can be higher. Investopedia's free online mortgage calculator helps you calculate your monthly mortgage payments and make the right financial decisions when buying a home.
You can use Bankrate's mortgage calculator to get an idea of how different down payment amounts affect your monthly mortgage payment and the interest you can save by investing more money. If you deposit a smaller amount of money, you can generally refinance within a few years to get rid of mortgage insurance and reduce your monthly mortgage payment.