How Much to Save for a House Down Payment (2026 Guide)

The most-asked question in any home-buying class: 'How much do I actually need to save?' The honest answer in 2026: more than the down payment, but less than 20% if you don't want to wait until you're 45. Here's how to set a real target and build a savings plan that gets you there.

Step 1: Pick a realistic home price for your market

The median US home price in early 2026 sits around $415,000, but local markets swing hard — $250,000 in parts of the Midwest, $900,000+ in coastal metros. Pull median sale prices for the specific ZIP codes you'd actually buy in. Average them. That's your working number.

Step 2: Choose your down payment percentage

Conventional wisdom says 20% to avoid PMI. Real life says most first-time buyers put down 6%–10%. Here are the trade-offs:

• 3% — Conventional 97 or HomeReady; lowest barrier, highest PMI
• 3.5% — FHA loan; flexible credit requirements, mortgage insurance for life of loan
• 5%–10% — Standard first-time buyer range; moderate PMI
• 20%+ — No PMI, best rates, but the wait is often years longer

Step 3: Add closing costs and reserves

Closing costs run 2%–5% of the purchase price — typically $8,000–$20,000 on a median home. Lenders also want to see 2–6 months of reserves (mortgage payments) sitting in cash after closing. A real target is: down payment + closing costs + reserves + a $5,000 move-in buffer.

Worked example: $400,000 home, 10% down

$40,000 down payment + $12,000 closing + $15,000 reserves + $5,000 move-in = $72,000 target. At 4.4% APY, that's $1,386/month over 4 years, or $914/month over 6 years. Plug it into the Savings Goal Calculator to see your exact number.

Where to keep house-fund money

If your goal is under 3 years away, do not invest it in stocks. A 30% drawdown the month before closing has ended more home purchases than any other single factor. Use a high-yield savings account, a no-penalty CD, or short-term Treasuries. Yield is secondary to liquidity and stability.

Down payment assistance programs

Most US states run down payment assistance (DPA) programs for first-time buyers — grants, forgivable loans, or matched savings. Funds range from $5,000 to $50,000 depending on state and income. Check your state's housing finance agency before you assume you need the full target.

Don't forget the after-purchase math

A house drains cash for the first 18 months — appliances, repairs, furniture, landscaping. Plan for that in your goal, not in surprise credit-card spending. Add a $10,000 'first-year ownership' line item if you're being honest.

Run your number

Enter your target, your timeline, and your APY into the Savings Goal Calculator. It will show the monthly contribution required, the milestone dates, and the compound growth — so you know exactly when you'll be able to make an offer.