Down Payment Scenario

Can I Afford a House with 5% Down?

Putting 5% down is one of the most common ways first-time buyers enter the market. While it gets you into a home sooner, it also means a higher loan amount and required Private Mortgage Insurance (PMI). See exactly how much house you can afford with a 5% down payment.

Quick insight: 5% down means higher monthly payments and PMI

With a 5% down payment, you'll finance 95% of the home's price. Because your equity is below 20%, lenders will require Private Mortgage Insurance (PMI), which adds to your monthly cost. However, PMI is temporary and can be removed once you reach 20% equity. Adjust the calculator below to match your income and the 5% down payment amount you have saved.

Income & Debts

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Loan & Down Payment

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Ongoing Housing Costs

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Lending Assumptions

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What Salary Do I Need for a Mortgage?

See exactly what income you need to qualify in 2026, plus how debt changes your numbers.

Affordability Estimate

You can afford a home around

$299,000

Based on your current income, debt, and housing cost assumptions.

Comfortable target$299K
Stretch maximumup to $329K

Monthly Housing Budget

$2,330

Comfortable

This appears to be within a comfortable borrowing range.

Estimated Loan Amount

$279,000

Estimated Cash Needed (Down + Closing)

$29,000

Estimates based on your inputs. Actual results may vary. Terms →

Calculation Breakdown

  • Estimated Principal & Interest$1,820
  • Estimated Property Taxes$300
  • Estimated Homeowner's Insurance$100
  • Estimated HOA$0
  • Estimated PMI$120
  • Front-End Ratio Used28.00%
  • Back-End Ratio Used34.00%

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Next steps

Calculate the exact cash needed to close on this homeValidate your decision before committing to buy

How 5% Down Affects Your Purchasing Power

Home Price5% Down PaymentLoan AmountEstimated Monthly Payment*Income Needed (28% Rule)
$300,000$15,000$285,000~$2,168/mo~$93,000/yr
$400,000$20,000$380,000~$2,890/mo~$124,000/yr
$500,000$25,000$475,000~$3,613/mo~$155,000/yr
$600,000$30,000$570,000~$4,335/mo~$186,000/yr
*Estimates based on a 6.8% interest rate, 30-year fixed loan, 1.2% property tax, $150/mo insurance, and 0.7% PMI. Your actual numbers will vary.

What to consider when putting 5% down

The Cost of PMI

Private Mortgage Insurance is an unavoidable extra cost when putting less than 20% down. While it helps you buy sooner, it adds hundreds to your monthly payment without building equity. Plan to request PMI removal once your loan balance drops to 80% of the home's value.

Keep Cash for Emergencies

A major benefit of putting 5% down instead of 20% is retaining cash liquidity. Homeownership comes with unexpected repairs (like an HVAC replacement or roof repair). Keeping cash in your savings rather than tying it up in home equity provides a vital safety net.

Lower Purchasing Power

Because your loan amount and monthly payments are higher with a 5% down payment, your total purchasing power is lower compared to having a 20% down payment. You will need a higher income to qualify for the same house.

Compare other down payment scenarios

Conventional Loan Minimums

See what happens when you put down 3%, 5%, or 10%.

The 20% Down Payment

Calculate the savings of putting 20% down to eliminate PMI.

Payment on a $400k House

See the full cost breakdown for a $400,000 property.

Frequently asked questions about 5% down payments

Can I buy a house with only 5% down?

Yes, you can buy a house with a 5% down payment using a conventional loan. Some conventional loans even allow as little as 3% down. FHA loans require a minimum of 3.5% down. Keep in mind that with less than 20% down, you will be required to pay Private Mortgage Insurance (PMI).

How does a 5% down payment affect my monthly payment?

A 5% down payment means you are financing 95% of the home's purchase price. This results in a higher loan amount and, consequently, a higher monthly principal and interest payment compared to putting 20% down. Additionally, you'll have an added monthly cost for PMI, which typically ranges from 0.5% to 1.5% of the loan amount annually.

What is PMI and how much will it cost with 5% down?

Private Mortgage Insurance (PMI) is required by lenders when you put less than 20% down. It protects the lender in case you default on the loan. For a 5% down payment, PMI usually costs between 0.5% and 1.5% of the total loan amount per year. This cost is added to your monthly mortgage payment.

How much income do I need to afford a $400k house with 5% down?

To afford a $400,000 house with a 5% down payment ($20,000), assuming a 6.8% interest rate, taxes, insurance, and PMI, your estimated monthly payment would be around $2,890. Using the 28% rule, you would need an annual household income of roughly $124,000 to comfortably afford this payment.

Estimates based on your inputs. Actual results may vary. Terms →