3, 5, 10, or 20 Percent Down in Austin: What Each Choice Costs
Team Price Real Estate’s August 7, 2026 market update put the median sold price in the Austin metro at $435,000, down 20.91 percent from the May 2022 peak. At that price, the down payment question has real dollars attached: 3 percent down is $13,050, while 20 percent down is $87,000. That is a cash gap of $73,950 between the smallest common conventional option and the tier everyone’s parents recommend. The right answer depends on your savings, your monthly budget, and what you want your bank account to look like the day after closing. This post walks through the actual numbers for 3, 5, 10, and 20 percent down on a median-priced Austin home, so you can compare the choices side by side.
Key points:
- At Austin’s $435,000 median (Team Price Real Estate, August 7, 2026), 3 percent down is $13,050 and 20 percent down is $87,000, a difference of $73,950 in cash at closing.
- Estimated monthly principal and interest at 6.69 percent (Freddie Mac PMMS, week ending August 6, 2026) ranges from about $2,243 with 20 percent down to about $2,720 with 3 percent down. Illustrative only, not a quote.
- PMI (private mortgage insurance) typically costs $30 to $70 per month for every $100,000 borrowed, per Freddie Mac, and it can be removed once you reach 20 percent equity.
- Putting 10 percent down instead of 20 keeps $43,500 in your pocket and adds roughly $281 per month in principal and interest, plus a PMI premium.
- Minimums by loan type: 3 percent for qualifying conventional programs, 3.5 percent for FHA, 0 percent for eligible VA borrowers.
- Closing costs are separate from the down payment, so budget for both.
Why this matters right now: Austin is a buyer’s market by most measures, with 5.9 months of supply and more than half of active listings showing price cuts (Team Price, August 7, 2026). Choosing the tier that fits your full financial picture, rather than a number you heard secondhand, can decide whether you buy comfortably this year or keep chasing a savings target you may not need.
How much cash does each down payment tier take on a $435,000 home?
On a $435,000 purchase, the current Austin metro median sold price per Team Price Real Estate’s August 7, 2026 update, the down payment tiers work out to: 3 percent is $13,050, 5 percent is $21,750, 10 percent is $43,500, and 20 percent is $87,000. Closing costs come on top of every tier and are often estimated at 2 to 3 percent of the purchase price, so your total cash to close will be higher than the down payment alone.
One clarification before the monthly math: the 3 percent option applies to specific conventional programs, such as Conventional 97 and HomeReady, which carry eligibility rules. We compared them in our guide to putting 3 percent down in Austin. Lenders approve loans at every tier, every week, subject to credit, income, and property qualification.
What each choice costs every month
The table below uses the $435,000 median price and the 30-year fixed average of 6.69 percent from Freddie Mac’s Primary Mortgage Market Survey for the week ending August 6, 2026. Figures are principal and interest only, rounded, and illustrative rather than a quote. Taxes, insurance, and HOA dues would sit on top of each number. PMI estimates use Freddie Mac’s published range of $30 to $70 per month per $100,000 borrowed; your actual premium depends heavily on your credit score and down payment size.
| Down payment | Cash down | Loan amount | Monthly P&I at 6.69% | Estimated PMI range |
|---|---|---|---|---|
| 3% | $13,050 | $421,950 | $2,720 | $127 to $295 |
| 5% | $21,750 | $413,250 | $2,664 | $124 to $289 |
| 10% | $43,500 | $391,500 | $2,524 | $117 to $274 |
| 20% | $87,000 | $348,000 | $2,243 | $0 |
Two patterns stand out. Moving from 3 to 5 percent costs $8,700 more in cash and saves only about $56 per month in principal and interest, though it can improve PMI pricing. Moving from 10 to 20 percent is the expensive jump: $43,500 more in cash buys about $281 per month in relief plus the end of PMI. Whether that trade makes sense depends on what else the $43,500 could do for you.
Rates move weekly, so the payment column will drift as the market does. Our Austin mortgage rates page tracks the current Freddie Mac survey figure if you are reading this later.
Do you have to put 20 percent down to buy in Austin?
No. Twenty percent down avoids PMI and produces the lowest monthly payment, but no rule requires it, and most first-time buyers put down far less. Conventional programs start at 3 percent for qualifying borrowers, FHA starts at 3.5 percent, and eligible VA borrowers can put zero down. PMI on a conventional loan is also temporary: it can be removed once you build enough equity.
The 20 percent figure earned its reputation decades ago and still gets repeated as if it were a legal minimum. In practice, PMI is the price of buying years sooner, and it has an expiration date: on a conventional loan you can request removal once your balance reaches 80 percent of the home’s original value, and your servicer must end it automatically at 78 percent if your payments are current. We covered every removal path in our post on getting rid of PMI in Austin.
Your down payment also does not have to come entirely from your own savings. Conventional and FHA loans both allow documented gift funds from acceptable donors, commonly parents or close family. The documentation rules are specific, and sloppy transfers cause real underwriting headaches, so read our breakdown of gift money mistakes Austin buyers make before anyone wires anything.
Where do FHA and VA fit into the picture?
FHA’s minimum is 3.5 percent, which is $15,225 on a $435,000 purchase. FHA charges an upfront mortgage insurance premium of 1.75 percent of the loan amount (about $7,346 here, usually financed into the balance) plus a monthly premium that runs near $192 on this loan size at the common 0.55 percent annual rate. The catch: with less than 10 percent down, FHA mortgage insurance generally lasts for the life of the loan rather than cancelling at 20 percent equity. Many buyers who qualify for both find that conventional with 3 to 5 percent down beats FHA once their credit score is strong enough, precisely because conventional PMI can be removed later.
VA loans allow eligible veterans, service members, and some surviving spouses to buy with zero down and no monthly mortgage insurance, though most borrowers pay a one-time funding fee. For buyers with VA entitlement this comparison often ends quickly, since keeping $87,000 in reserve while paying no PMI is hard to beat, subject to credit, income, and property qualification.
How should you pick your number?
Start with what remains after closing rather than the biggest down payment you can scrape together. A larger down payment that empties every account leaves you one broken air conditioner away from a credit card balance at a worse rate than your mortgage. Lenders think the same way: reserves strengthen a file, and at Mortgage Austin we regularly see a 10 percent down offer with healthy reserves underwrite more smoothly than a 20 percent down offer with nothing left.
Then weigh the monthly trade honestly. Moving from 10 to 20 percent down saves roughly $281 per month plus PMI, set against $43,500 of extra cash. For some buyers that certainty is exactly right. For others, keeping the cash for repairs, moving costs, or investments fits better. Pricing can also improve as your down payment rises, since lower loan-to-value tiers may carry better rate adjustments, subject to qualification, so model it with real numbers rather than assuming.
Finally, remember the market context. With 5.9 months of supply and widespread price cuts, Austin buyers in August 2026 can often negotiate seller-paid closing costs, which changes the cash math at every tier: a seller credit covering closing costs can let you redirect that cash toward a larger down payment or keep it in reserve.
If you want to see these four tiers priced against your actual credit profile and target neighborhoods, schedule a discovery call and we will walk through the numbers together. No pressure, no commitment, just a clear side-by-side so you can pick the tier that fits.
Frequently Asked Questions
How much down payment do I need to buy a $435,000 house in Austin?
Qualifying conventional programs start at 3 percent down, which is $13,050 on a $435,000 purchase. FHA requires 3.5 percent, or $15,225, and eligible VA borrowers can put zero down. Twenty percent down would be $87,000, and it is optional, not required. All options are subject to credit, income, and property qualification.
How much does PMI cost on a conventional loan in Austin?
Freddie Mac estimates PMI typically costs $30 to $70 per month for every $100,000 borrowed. On a loan near $400,000, that works out to roughly $120 to $280 per month. Your actual premium depends mostly on your credit score and how much you put down, with stronger scores and larger down payments earning cheaper PMI.
Does putting more money down get me a lower mortgage rate?
It can. Conventional loan pricing uses adjustments tied to loan-to-value and credit score, so a larger down payment may improve your rate or your PMI premium, subject to qualification. The improvement is often smaller than buyers expect, though, so it is worth pricing your actual scenario at two or three tiers before committing extra cash.
Can my down payment be a gift from family?
Yes. Conventional and FHA loans both allow gift funds from acceptable donors, typically family members, to cover part or all of the down payment. The gift must be documented with a signed gift letter and a clear paper trail showing the transfer. Undocumented cash deposits are the most common way gifts go wrong in underwriting.
When does PMI go away on a conventional loan?
You can request PMI removal once your loan balance reaches 80 percent of the home’s original value, and your servicer must cancel it automatically at 78 percent if your payments are current. You may also be able to remove it earlier through a new appraisal if your home’s value has risen enough, depending on your servicer’s rules.
Is it better to put 10 or 20 percent down in Austin?
It depends on your reserves and your monthly budget. At Austin’s $435,000 median price, the difference is $43,500 in cash, which buys about $281 per month in principal and interest savings plus the elimination of PMI at today’s illustrative rates. Buyers with thin savings usually benefit from keeping cash in reserve; buyers with deep savings often prefer the lower payment.
Ferrando Financial LLC | NMLS# 2403080 | Licensed in Texas. This content is for educational purposes only and does not constitute a commitment to lend. Loan approval is subject to credit, income, and property qualification. Payment and PMI figures are illustrative estimates based on cited survey data, not a quote or an offer of credit; your rate, premium, and costs will vary. Sources: Freddie Mac Primary Mortgage Market Survey (week ending August 6, 2026); Team Price Real Estate Austin market update (August 7, 2026); Freddie Mac PMI cost guidance.
