# How Much to Save Before Buying a House in 2026 By Opendoor Editorial Team | 2022-02-19 > When it comes to saving up for a house, the down payment is just the beginning. At a minimum, most buyers need to set aside 3% for a down payment, 2% to 5% for closing costs, $1,000 for moving expenses, and an optional budget for furniture, repairs, and upgrades. ## Key Takeaways #### Key Takeaways - Set a target down payment first, then **divide by your months-to-buy** to set a monthly savings rate (e.g., $30,000 in 24 months = $1,250/month). - Common down payment minimums: [**FHA 3.5%**](https://help.opendoor.com/buying/financing-closing/fha-eligibility), **conventional 3-5%** for first-time buyers, **20%** to avoid [private mortgage insurance (PMI)](https://www.consumerfinance.gov/ask-cfpb/what-is-private-mortgage-insurance-en-122/), and **0% down** for eligible [VA](https://www.va.gov/housing-assistance/home-loans/) and [USDA Rural Development](https://www.rd.usda.gov/programs-services/single-family-housing-programs) loans. - Beyond the down payment, plan for **closing costs of 2 to 5%** of the price, plus moving costs and a reserve fund of. - Use a separate **high-yield savings account or short-term Treasury fund** for the down-payment money — liquid, low-risk, and earning interest while you save. - [Down payment assistance (DPA) programs](https://www.hud.gov/topics/buying_a_home) at the state, county, and city level can reduce your savings target by thousands; check eligibility before you list your budget. # How Much to Save Before Buying a House in 2026 Buying a home is one of the biggest financial moves you'll ever make — and one of the most common questions that comes with it is deceptively simple: how much do I actually need to save? The answer depends on more than just the down payment. Between closing costs, moving expenses, and the cash reserves you'll want after you get the keys, your true savings target might look different than you expect. Here's how to calculate a number that works for your situation. [Get your offer](#) ## How much money should you save to buy a house Most buyers save between 10% and 25% of a home's purchase price before buying, covering [all the costs involved](https://www.opendoor.com/articles/how-much-does-it-cost-to-buy-a-house). For a $400,000 home, that works out to $40,000 to $100,000. The range is wide because your total depends on three main buckets: your down payment, closing costs, and cash reserves for after you move in. Where you land in that range comes down to a few things. The type of loan you qualify for matters a lot. So does how much financial cushion you want on day one. Someone using an FHA loan with 3.5% down has a very different savings target than someone putting 20% down on a conventional loan. Here's how the total typically breaks down: - **Down payment:** The upfront portion of the home price, usually 3% to 20% - **Closing costs:** Fees to finalize the purchase, typically 2% to 5% - **Cash reserves:** Savings you keep after closing for emergencies and repairs Related: [down payment amounts and guidance](https://www.opendoor.com/articles/down-payment-amount). ## Homebuying costs you need to save for Each cost category serves a different purpose. Breaking them down helps you build a savings target that actually matches what you'll pay. ### Down payment Your [down payment](https://www.opendoor.com/articles/down-payment-amount) is the cash you bring to closing, expressed as a percentage of the home's price. On a $350,000 home, 10% down equals $35,000. At 20%, that jumps to $70,000. Putting down 20% or more lets you skip [private mortgage insurance](https://www.opendoor.com/articles/what-is-pmi), often called PMI. PMI is a monthly fee that protects the lender if you stop making payments. It typically costs 0.5% to 1% of your loan amount per year, and you pay it until you reach 20% equity in the home. Many buyers, especially first-timers, put down less than 20% and still buy homes successfully. The trade-off is higher monthly payments and PMI until you build enough equity. ### Closing costs Closing costs are the fees you pay to finalize your purchase. They typically run 2% to 5% of the home price. On a $350,000 home, expect $7,000 to $17,500. The fees cover a mix of services: - **Lender fees:** Charges for processing and underwriting your loan - **Appraisal fee:** Pays for a professional to assess the home's value - **Title insurance:** Protects against ownership disputes - **Escrow fees:** Covers the third party managing the transaction Your lender will give you a loan estimate early in the process, so you'll have a clear picture before closing day arrives. ### Earnest money deposit When you make an offer, you'll typically submit an [earnest money](https://www.opendoor.com/articles/earnest-money) deposit. This is a good-faith payment showing you're serious about buying. It usually runs 1% to 3% of the purchase price. The deposit isn't an extra cost. It goes into an escrow account and gets applied to your down payment or closing costs at closing. Think of it as paying part of your down payment early. ### Prepaid costs Prepaid costs are upfront payments for recurring expenses, collected at closing before they're technically due. Your lender will ask for your first year's homeowners insurance premium, a few months of property taxes, and some prepaid mortgage interest. The money goes into an [escrow account](https://www.opendoor.com/articles/what-is-escrow). Your lender then uses it to pay insurance and taxes on your behalf throughout the year. ### Moving expenses Here's a cost many buyers overlook: getting your stuff from point A to point B. Local moves typically cost $1,000 to $2,000, while long-distance moves can run $5,000 or more depending on distance and how much you're hauling. Beyond movers, factor in packing supplies, utility setup fees, and any temporary storage. If you're selling one home and buying another, you might also face overlap costs if the timing doesn't line up perfectly. ### Cash reserves Cash reserves are the savings you keep after closing. They're your safety net for unexpected repairs, maintenance, or changes in income. Most financial advisors suggest keeping three to six months of living expenses in reserve. Lenders often check that you have reserves before approving your loan. But the real benefit is peace of mind. When you own a home, you're on the hook for everything from a broken water heater to a leaky roof. Having cash on hand keeps surprises from turning into emergencies. Related: [how much does it cost to buy a house](https://www.opendoor.com/articles/how-much-does-it-cost-to-buy-a-house) · [what is PMI](https://www.opendoor.com/articles/what-is-pmi) · [earnest money deposit basics](https://www.opendoor.com/articles/earnest-money). ## Down payment minimums by loan type Your minimum down payment is one of the biggest levers on your savings target, and it's set by the loan program — not by your lender's preference. The Opendoor Help Center confirms the most common ranges: [FHA loans allow a down payment as low as 3.5%, while conventional loan down payments typically run 3 to 20%](https://help.opendoor.com/buying/financing-closing/fha-eligibility). Below are the loan types most U.S. buyers actually use, with the minimums and the trade-offs. - **FHA loan — 3.5% minimum.** Backed by the [Federal Housing Administration](https://www.hud.gov/program_offices/housing/fhahistory). Minimum credit score is typically **580+**, mortgage insurance (MIP) is required for the life of the loan in most cases, and there are property and seller restrictions (notably the [90-day seller-ownership requirement on resales to FHA buyers](https://help.opendoor.com/buying/financing-closing/fha-eligibility)). - **Conventional loan — 3 to 5% minimum.** Many first-time-buyer programs (Fannie Mae HomeReady, Freddie Mac Home Possible) allow 3% down with private mortgage insurance (PMI) when the loan-to-value is above 80%. Conventional credit score minimum is typically **620+**. PMI drops off once LTV reaches 78 to 80%. - **VA loan — 0% down.** Available to eligible service members, veterans, and surviving spouses through the [Department of Veterans Affairs](https://www.va.gov/housing-assistance/home-loans/). No PMI, but a one-time VA funding fee applies (waived for some applicants). - **USDA loan — 0% down.** For eligible buyers in qualifying rural areas through the [USDA Rural Development Single-Family Housing Loan Program](https://www.rd.usda.gov/programs-services/single-family-housing-programs). Income limits apply. - **Jumbo loan — 10 to 20%+.** For loans above the conforming loan limit. Requirements vary by lender and are typically stricter on credit, reserves, and down payment. - **20% down (conventional).** Lets you avoid PMI entirely. On a $400,000 home, that's an $80,000 down payment — meaningfully more upfront, but the monthly savings on PMI can be **$100 to $300 per month** depending on credit and LTV typical PMI cost range — confirm against current MGIC/Genworth rate cards. For first-time buyers, the question is rarely "can I qualify for 20% down?" — it's whether the speed of getting into a home (smaller down payment) is worth the PMI cost, versus building more savings (larger down payment, lower monthly). For most buyers, 5 to 10% down with PMI that drops off in a few years is the practical compromise. ## How much house can you afford based on your income Your income plays a big role in [how much home you can comfortably buy](https://www.opendoor.com/articles/how-to-determine-how-much-home-you-can-afford). Lenders use detailed formulas to calculate your maximum loan amount, but a simpler guideline can help you set a realistic target. ### The 25 percent take-home pay rule A common approach is keeping your total monthly housing costs at or below 25% of your take-home pay. That includes your mortgage principal, interest, property taxes, homeowners insurance, and any HOA fees. Why 25%? Staying at or below this threshold leaves room for other priorities: retirement savings, emergency funds, and everyday expenses. Going higher often leads to feeling "house poor," where you own a home but struggle to afford much else. ### What salary you need for different home prices The connection between income and home price depends on your down payment, interest rate, property taxes, and insurance costs. Still, a general framework helps illustrate how the numbers relate: | **Home price** | **Estimated monthly payment** | **Suggested annual take-home pay** | | $250,000 | $1,800–$2,200 | $86,000–$106,000 | | $350,000 | $2,400–$2,900 | $115,000–$139,000 | | $450,000 | $3,000–$3,600 | $144,000–$173,000 | The estimates above assume a 20% down payment and include taxes and insurance. Your actual numbers will vary based on local tax rates and current mortgage rates, so a mortgage calculator can give you a more precise picture. Related: [how much mortgage you can afford](https://www.opendoor.com/articles/how-much-mortgage-can-i-afford). ## How much should you have saved by age There's no universal savings benchmark tied to age. Life circumstances, income levels, and housing markets vary too much. That said, understanding typical patterns at different stages can help you gauge where you stand. ### Saving for a house at 25 Buyers in their mid-twenties often have less saved but more time to build both savings and credit. First-time buyer programs that allow lower down payments can help bridge the gap while you continue growing your emergency fund. The advantage of starting early is simple math. Someone saving $500 per month at 25 could have $30,000 by age 30, which is enough for a solid down payment in many markets. ### Saving for a house at 30 Thirty is a common age for first-time buyers. Many people at this stage have more stable incomes and better savings habits. The key is balancing homeownership goals with other priorities like retirement contributions and paying down debt. If you're approaching 30 and haven't started saving for a home, you're not behind. You're just working with a different timeline. Consistent savings habits matter more than trying to catch up all at once. ### Saving for a house at 40 Buyers at 40 often bring higher incomes and more substantial savings. That can mean larger down payments, better loan terms, and more flexibility in choosing a home. The trade-off is a shorter runway before retirement. A larger down payment can help keep monthly payments manageable while preserving your ability to save for the future. ## How much should a first-time homebuyer save First-time buyers often have access to programs that reduce the upfront savings required. While the 10% to 25% guideline still applies, several options can lower that threshold. Government-backed loans offer some of the most accessible paths: - [**FHA loans**](https://www.opendoor.com/articles/what-is-an-fha-loan-and-how-does-it-work)**:** Require as little as 3.5% down with a credit score of 580 or higher - **VA loans:** Available to veterans and active military, often with no down payment - **USDA loans:** Designed for buyers in eligible rural areas, also with no down payment - **Down payment assistance programs:** State and local programs offering grants or low-interest loans Even with a lower down payment, you'll still want to budget for closing costs and keep an emergency fund. The goal isn't just to qualify for a mortgage. It's to buy a home you can comfortably afford over time. ## Saving on a low income or with limited cash flow Saving for a home on a tight income is harder, but it's not impossible — the move is to stack the right programs and lower the target rather than try to out-save a budget that doesn't have room. The [HUD homebuying guide](https://www.hud.gov/topics/buying_a_home) is the federal starting point for buyer assistance, and most states layer their own programs on top. Four ways to lower the target before you try to save more: - **Use a low-down-payment loan program.** [FHA at 3.5%](https://help.opendoor.com/buying/financing-closing/fha-eligibility), conventional first-time buyer programs at 3%, [VA at 0% down for eligible service members](https://www.va.gov/housing-assistance/home-loans/), and [USDA at 0% down for qualifying rural areas](https://www.rd.usda.gov/programs-services/single-family-housing-programs) cut the upfront cash dramatically. - **Apply for down payment assistance (DPA).** State housing finance agencies (HFAs), county programs, and city programs offer grants, forgivable loans, and silent second mortgages that can cover some or all of your down payment. HUD maintains a [state-by-state directory](https://www.hud.gov/states) of local agencies. - **Stack closing-cost help from the seller.** A seller concession of 2 to 3% of the price (negotiated into the contract) can cover most or all of your closing costs, lowering the cash you need to bring to the table. - **Use lender credits or **[**mortgage incentives**](https://help.opendoor.com/buying/making-an-offer/mortgage-incentives)** where available.** Some lenders contribute a dollar amount toward closing costs in exchange for a slightly higher rate; on a tight timeline that trade can lower the savings target by $5,000 to $10,000. On the savings side, focus on the highest-leverage moves: a roommate (or a downsize on the next rent renewal), a side income, a deliberate effort to lift your credit score (which can lower PMI cost and free up monthly cash), and routing every windfall to the dedicated account. None of this is glamorous, but combined with a low-down-payment loan and a DPA program, it can compress what feels like a 5-year savings horizon into 2 to 3. ## How to save for a house faster Building your home savings doesn't have to take a decade. A few focused moves can speed up your timeline. ### 1. Set a specific savings target Start by calculating a concrete goal based on your target home price and desired down payment. If you're aiming for a $300,000 home with 10% down, your down payment target is $30,000. Add another $10,000 to $15,000 for closing costs and reserves. Working backward from a target move date helps you figure out how much to save each month. A $45,000 goal over three years means setting aside roughly $1,250 per month. ### 2. Automate monthly contributions Setting up automatic transfers to a dedicated savings account removes the temptation to spend that money elsewhere. Treat your house fund like a bill that gets paid every month. You'll be surprised how quickly the balance grows. ### 3. Sell your current home to unlock equity If you already own a home, selling it can provide a significant lump sum for your next down payment, though you'll need to account for [the costs of selling](https://www.opendoor.com/articles/how-much-does-it-cost-to-sell-a-house). The equity you've built, which is the difference between your home's value and what you owe, becomes available cash at closing. For homeowners looking to move, Opendoor's cash offer can simplify the process. You'll know exactly what you're getting for your current home, which makes planning your next purchase much easier. [Get a free cash offer](https://www.opendoor.com/address-entry) to see what's possible. ### 4. Cut discretionary spending Review your monthly expenses for opportunities to redirect funds toward your house savings. Subscriptions you rarely use, frequent dining out, and impulse purchases are common areas where small changes add up. ### 5. Explore down payment assistance programs Many states and localities offer grants or forgivable loans to help with down payments. Eligibility varies by location and income level, but the programs can reduce your savings target by thousands of dollars — with [an average benefit of $18,000](https://www.housingwire.com/articles/down-payment-assistance-2025/). ## Monthly savings math: how much to set aside each month The cleanest way to set a monthly savings rate is to divide your **total target** by the **months until your buy date**. The formula is **monthly savings = (down payment + closing costs + reserve) ÷ months**. Once you have that number, automating the transfer is the single best thing you can do to actually hit it. Three worked examples on a $400,000 home, using the [Opendoor Help Center's stated FHA 3.5% and conventional 3-20% ranges](https://help.opendoor.com/buying/financing-closing/fha-eligibility): - **FHA 3.5% in 24 months.** Down payment $14,000 + closing costs (~3%) $12,000 + small reserve $4,000 = **$30,000 target**. Divided by 24 months = **$1,250/month**. - **Conventional 5% in 36 months.** Down payment $20,000 + closing costs $12,000 + reserve $4,000 = **$36,000 target**. Divided by 36 months = **$1,000/month**. - **Conventional 20% in 60 months.** Down payment $80,000 + closing costs $12,000 + reserve $6,000 = **$98,000 target**. Divided by 60 months = **$1,633/month**. If the monthly number is more than ~15% of your gross income, the target date is probably too aggressive for your income — either extend the timeline, lower the price range, or pick a lower-down-payment loan program. The math should fit the budget, not the other way around. Once you know your monthly number, the **monthly mortgage payment** side of the equation is the other half of the picture — your savings rate is only as useful as the home price it can support. Use Opendoor's article on [how much mortgage you can afford](https://www.opendoor.com/articles/how-much-mortgage-can-i-afford) to back-solve your price range from a comfortable monthly housing payment, then come back and set your savings target. Treating savings (down payment) and monthly housing budget as two halves of the same plan is what separates buyers who close on time from buyers who stall. ## How to save for a house while renting Saving while you rent is the most common buyer scenario, and the constraint isn't usually willpower — it's that rent already absorbs a big share of the budget. The fastest path is to pick a target and a date, automate the transfer, and trim the three largest flexible expenses rather than chasing small wins. The [Consumer Financial Protection Bureau's home-buying tools](https://www.consumerfinance.gov/owning-a-home/) include calculators and a budget worksheet that can help you set the target. A five-step renter playbook: 1. **Set the target number.** Pick a target down payment (3.5% for FHA, 5% for conventional, 20% to avoid PMI) for your expected price range, then add 3% for closing costs and a small reserve. On a $400,000 purchase, a 5% down + 3% closing target is $32,000. 2. **Divide by months.** $32,000 in 24 months is **$1,333/month**; in 36 months, **$889/month**. Pick a date that lets the monthly number fit your budget without crushing it. 3. **Open a dedicated **[**high-yield savings account**](https://www.consumerfinance.gov/ask-cfpb/what-is-a-savings-account-en-907/)** or short-term Treasury account.** Keep the down-payment money out of your checking and out of the stock market. Liquid and low-risk is the goal — you can't afford a drawdown on a two-year horizon. 4. **Automate the transfer the day after each paycheck.** This is the single biggest difference between savers who hit the target and savers who don't. Treat the transfer like a non-negotiable bill. 5. **Attack the three largest flexible categories.** For most renters that's **rent, transportation, and food**, in that order. A roommate, a downsize on the next lease renewal, switching to one car, or cutting restaurant spend by half each move the savings rate by hundreds per month — orders of magnitude bigger than skipping a coffee. Route every windfall — tax refund, bonus, side-gig income — directly into the dedicated account before it touches checking. Renters who hit their target on time consistently report two habits: a written target with a date, and automated transfers they don't have to remember. ## Signs you have enough saved to buy a home Hitting a specific savings number is just one piece of the puzzle. True financial readiness involves several factors working together: - **Down payment funded:** You've reached your target percentage of the expected home price - **Closing costs covered:** You have funds beyond the down payment - **Emergency fund intact:** You'll still have three to six months of expenses after closing - **Stable income:** Your employment and earnings are reliable - **Debt under control:** Your debt-to-income ratio leaves room for a mortgage payment If you can check most of the boxes above, you're likely in a strong position to start your home search. ## Move forward on your terms with Opendoor Saving for a home takes time and discipline. And if you're a current homeowner looking to make your next move, selling your existing home can unlock the equity you need to reach your goals faster. Opendoor offers a simpler path forward. With a cash offer, you'll know exactly what your current home is worth and can plan your next purchase with confidence. No open houses, no uncertainty about timing. [Get a free cash offer](https://www.opendoor.com/address-entry) and see how Opendoor can help you take the next step. [Get your offer](#) **Frequently asked questions about saving for a house** | **Supported Locations** | | | **Cities / Areas** | **States** | | [Columbia](/sell/columbia_sc), [Columbus](/sell/columbus_oh), [Corpus Christi](/sell/corpus_christi_tx), [Detroit](/sell/detroit_mi), [East Texas](/sell/east_texas), [El Paso](/sell/el_paso), [Florida Panhandle](/sell/florida_panhandle), [Greensboro](/sell/greensboro_nc), [Greenville](/sell/greenville_sc), [Indianapolis](/sell/indianapolis_in), [Kansas City](/sell/kansas_city), [Killeen](/sell/killeen_tx), [Knoxville](/sell/knoxville_tn), [Las Vegas](/sell/las_vegas), [Little Rock](/sell/little_rock_ar), [Louisville](/sell/louisville_in_ky), [Memphis](/sell/memphis_tn), [Miami](/sell/miami_fl), [Milwaukee-Waukesha](/sell/milwaukee_waukesha_wi), [Minneapolis](/sell/minneapolis), [New Orleans](/sell/new_orleans_la), [New York & New Jersey](/sell/new_york_new_jersey), [Northern Colorado](/sell/northern_colorado), [Oklahoma City](/sell/oklahoma_city_ok), [Omaha](/sell/omaha_ne), [Philadelphia](/sell/philadelphia_pa), [Pittsburgh](/sell/pittsburgh_pa), [Portland](/sell/portland), [Prescott](/sell/prescott_az), [Reno](/sell/reno_nv), [Richmond](/sell/richmond_va), [Salt Lake City](/sell/salt_lake_city), [San Antonio](/sell/san_antonio), [Seattle](/sell/seattle_wa), [San Francisco Bay Area](/sell/sf_bay_area), [South Texas](/sell/south_texas), [Southwest Florida](/sell/southwest_fl), [St Louis](/sell/st_louis), [Tucson](/sell/tucson), [Tulsa](/sell/tulsa_ok), [Virginia Beach](/sell/virginia_beach_va), [West Texas](/sell/west_texas), [Western New York](/sell/western_ny) | [Alabama](/sell/alabama_other), [Arkansas](/sell/arkansas_other), [California](/sell/california_other), [Colorado](/sell/colorado_other), [Connecticut](/sell/connecticut_other), [Delaware](/sell/delaware_other), [Georgia](/sell/georgia_other), [Idaho](/sell/idaho_other), [Illinois](/sell/illinois_other), [Indiana](/sell/indiana_other), [Iowa](/sell/iowa_other), [Kansas](/sell/kansas_other), [Kentucky](/sell/kentucky_other), [Louisiana](/sell/louisiana_other), [Maine](/sell/maine_other), [Maryland](/sell/maryland_other), [Massachusetts](/sell/massachusetts_other), [Michigan](/sell/michigan_other), [Minnesota](/sell/minnesota_other), [Mississippi](/sell/mississippi_other), [Missouri](/sell/missouri_other), [Montana](/sell/montana_other), [Nebraska](/sell/nebraska_other), [Nevada](/sell/nevada_other), [New Hampshire](/sell/new_hampshire_other), [New Mexico](/sell/new_mexico_other), [New York](/sell/new_york_other), [North Carolina](/sell/north_carolina_other), [North Dakota](/sell/north_dakota_other), [Ohio](/sell/ohio_other), [Oklahoma](/sell/oklahoma_other), [Oregon](/sell/oregon_other), [Pennsylvania](/sell/pennsylvania_other), [South Carolina](/sell/south_carolina_other), [South Dakota](/sell/south_dakota_other), [Tennessee](/sell/tennessee_other), [Utah](/sell/utah_other), [Vermont](/sell/vermont_other), [Virginia](/sell/virginia_other), [Washington](/sell/washington_other), [West Virginia](/sell/west_virginia_other), [Wisconsin](/sell/wisconsin_other), [Wyoming](/sell/wyoming_other) | --- *Originally published at [https://www.opendoor.com/articles/how-much-to-save-for-house](https://www.opendoor.com/articles/how-much-to-save-for-house)*