Saving for a House Deposit
The down payment is not the number. Closing costs, reserves and moving costs are the rest of it.
At a glance
Figures checked 1 Sep 2026
What to take away
- Add closing costs, moving costs and a post-purchase reserve to the deposit target.
- Money needed within three years should not be invested in stocks.
- Below 20% down usually means mortgage insurance until you reach sufficient equity.
Work backwards from the total cash required at closing, not from the deposit percentage.
| Item | Amount |
|---|---|
| 20% down payment | $84,000 |
| Closing costs at 3.5% | $14,700 |
| Moving and immediate repairs | $5,000 |
| Post-purchase reserve | $10,000 |
| Total | $113,700 |
Where to keep it
Under three years: a high-yield savings account or short-term Treasury bills. Three to five years: mostly cash, with any market exposure sized so a decline would not delay the purchase. A deposit that halves in a downturn is not a deposit.
Lenders scrutinise large recent deposits. Season the funds in one account for at least two to three months before applying, and be ready to document any gift.
Common questions
No. Conventional loans allow less, and FHA and VA programmes have their own rules. Below 20% usually means mortgage insurance, which adds to the monthly payment until you build enough equity.