Plan on a down payment of $100,000 to $200,000 for a million-dollar house — 10% to 20% of the purchase price. Twenty percent is the figure most buyers target, because it keeps the loan below the 2026 conforming limit in most of the country, unlocks the best interest rates, and eliminates private mortgage insurance. Ten percent is available through many jumbo lenders if your credit and reserves are strong. What you actually need depends on where you buy, what loan you qualify for, and how much cash you can keep in reserve after closing.
Why 20 Percent Is the Common Target
The Federal Housing Finance Agency sets a yearly ceiling on mortgages that Fannie Mae and Freddie Mac can back. For 2026, the baseline conforming limit for a single-unit home is $832,750 in most of the country.1Federal Housing Finance Agency. FHFA Announces Conforming Loan Limit Values for 2026 A loan above the local limit becomes a jumbo, which brings stricter qualification standards and often a higher rate.
Put 20% down on a $1,000,000 home and your loan is $800,000 — under the 2026 baseline. A conventional conforming loan is possible. Drop to 15% down and the $850,000 balance crosses the line into jumbo territory in most markets.
Location changes the math. In designated high-cost areas — parts of California, the New York metro, Hawaii, and similar markets — the conforming ceiling rises to $1,249,125 for 2026.1Federal Housing Finance Agency. FHFA Announces Conforming Loan Limit Values for 2026 In those areas, even 10% down leaves you comfortably inside conforming territory.
What Each Down Payment Tier Looks Like
Here is how the three common down payments break down on a $1,000,000 purchase in a baseline-limit market:
- 20% ($200,000). Loan of $800,000. Conforming in most markets for 2026. No PMI. Best rate tier at most lenders.
- 15% ($150,000). Loan of $850,000. Jumbo in baseline areas, conforming in high-cost areas. PMI usually applies unless the lender waives it in exchange for a higher rate.
- 10% ($100,000). Loan of $900,000. Available through many jumbo lenders for strong credit profiles. Jumbo in baseline markets; may remain conforming in high-cost markets.
Some private wealth divisions offer custom financing that departs from these tiers and looks at total assets under management rather than cash on hand for the specific purchase.
Credit and Debt Requirements
Jumbo lenders set their own rules because the loans are not backed by Fannie Mae or Freddie Mac. Most require a minimum FICO score of at least 680 to 700, and some set the bar at 740 or higher for the lowest down payment options. Scores above 760 generally see the best rates.
Your debt-to-income ratio matters just as much. Most jumbo lenders cap total monthly debt at 43% to 50% of gross monthly income. A buyer earning $20,000 a month would need total debt obligations — including the new mortgage payment — to stay below roughly $8,600 to $10,000.
Private Mortgage Insurance Below 20 Percent
Put down less than 20% and private mortgage insurance protects the lender if you default.2Fannie Mae. What to Know About Private Mortgage Insurance How it works depends on whether your loan is conforming or jumbo.
On a conforming loan, PMI runs roughly 0.5% to just under 2% of the loan balance per year.2Fannie Mae. What to Know About Private Mortgage Insurance On an $850,000 balance, that could add $350 to $1,400 to your monthly payment. Under the Homeowners Protection Act, you can request cancellation once the balance reaches 80% of the home’s original value, and the lender must automatically terminate it at 78%.3Office of the Law Revision Counsel. 12 USC 4901 – Definitions
Jumbo lenders often handle PMI more favorably. Many major lenders waive it on jumbo loans with as little as 10% down and build the added risk into a slightly higher rate. When a jumbo lender does require PMI, the Homeowners Protection Act allows the loan to be classified as high-risk, in which case termination happens when the balance reaches 77% of the original property value based on the amortization schedule rather than the 78% and 80% thresholds that apply to standard loans.4Federal Reserve Board. Homeowners Protection Act of 1998
Some lenders also offer single-premium PMI, where you pay the entire cost in a lump sum at closing. That eliminates the monthly charge but adds to the cash you need on day one and may not be recoverable if you sell or refinance early.
Closing Costs and Transfer Taxes on Top of the Down Payment
The down payment is not the only check you write. Closing costs — appraisal, title insurance, origination, attorney fees, escrow deposits — typically run 2% to 5% of the loan amount.5Fannie Mae. Closing Costs Calculator On an $800,000 loan, that is roughly $16,000 to $40,000 more out of pocket.
Several states and localities also impose transfer taxes or so-called mansion taxes above certain sale thresholds. About a half-dozen states and Washington, D.C. currently impose these surcharges, with rates ranging from around 1% to over 4% depending on jurisdiction and price. On a million-dollar sale, even a 1% tax adds $10,000.
Add it up: a buyer putting 20% down on a $1,000,000 home should expect total upfront cash of roughly $225,000 to $260,000, or more in a high-tax jurisdiction.
Cash Reserves After Closing
Lenders at this price point want to see money left over after closing — liquid funds you can reach without selling the house. Reserves are measured in months of the total housing payment, including principal, interest, taxes, and insurance.
For loans between the conforming limit and roughly $1.5 million, expect a requirement of 3 to 6 months in reserve. For a million-dollar purchase, that generally means at least $25,000 to $50,000 in accessible funds beyond what you spend at closing.
Checking, savings, money market, and brokerage balances qualify. Retirement accounts may count, but lenders often credit only 60% to 70% of the balance because early withdrawals trigger taxes and penalties. Self-employed borrowers face the same reserve thresholds and must also provide two years of tax returns plus profit-and-loss statements to document income.
A Tax Reason Some Buyers Put 25 Percent Down
Federal law limits the home mortgage interest deduction to interest on the first $750,000 of mortgage debt secured after December 15, 2017 ($375,000 if married filing separately).6Internal Revenue Service. Publication 936, Home Mortgage Interest Deduction The cap was made permanent under the One Big Beautiful Bill Act signed in 2025.
On an $800,000 loan, interest attributable to the first $750,000 is deductible; interest on the remaining $50,000 is not. Buyers who put at least 25% down — $250,000 — keep the loan at or below $750,000 and capture the deduction on every dollar of interest paid. Whether that trade-off is worth an extra $50,000 in cash at closing depends on your tax bracket, your alternative uses for the money, and how long you plan to hold the loan.
If you pay PMI, the One Big Beautiful Bill Act also permanently reinstated the deduction for mortgage insurance premiums starting with the 2026 tax year. The deduction had expired at the end of 2024 and was unavailable for 2025.
Hold Extra Cash for an Appraisal Gap
A lender will not finance more than the home’s appraised value, no matter what you agreed to pay. If a $1,000,000 contract appraises at $950,000, the $50,000 gap has to come from somewhere — additional cash, a renegotiated price, or walking away if your contract includes an appraisal contingency. Comparable sales data can be thin in luxury markets, so gaps are not unusual at this price.
Lenders originating higher-priced mortgage loans must obtain a written appraisal from a licensed or certified appraiser that includes an opinion of market value.7Consumer Financial Protection Bureau. Higher Priced Mortgage Loan Rule Compliance Guide Building a cushion above your planned down payment gives you room to close if the number comes in low.