How Much Money Do You Need to Buy a $400,000 House?

Down payment scenarios

Your down payment is the biggest single number — and the one with the most options. Conventional loans through Fannie Mae allow as little as 3% down; FHA loans 3.5% at a 580+ credit score; VA loans 0% for eligible borrowers. Anything under 20% on a conventional loan adds PMI — model the exact monthly cost on our PMI calculator. Here is how each choice plays out on a $400,000 home at 6.58% over 30 years:

The 0%-down VA and USDA options sit in the middle of this series in dollar terms. 20% down on a $400,000 home is $80,000, meaningful money to skip but not the largest sum at stake in this price range — bigger than skipping it at the cheaper end of this series, smaller than at the pricier end.

Principal & interest only, at the Freddie Mac PMMS 30-year average (6.58%, week of July 23, 2026). Taxes, insurance, and mortgage insurance are added on top. Down-payment minimums per Fannie Mae and HUD/FHA.

Closing costs

The CFPB says buyer closing costs typically run 2%–5% of the purchase price. On a $400,000 home that is about $8,000 to $20,000, with a rough midpoint near $12,000. These are separate from your down payment and cover lender origination, appraisal, title insurance, government recording and transfer taxes, and prepaid escrow items (property taxes, homeowners insurance, and interest to month-end). Transfer taxes and title pricing vary a lot by state — estimate the total with our closing costs calculator.

That flat 3% midpoint hides something worth knowing: not every fee in that range scales with price. A chunk of it is fixed in dollars regardless of what you're buying — the appraisal (roughly $500–$1,000), the home inspection ($300–$500), the credit report fee (~$35–$50), and the recording fee ($20–$250) cost close to the same amount on a $200,000 house and a $700,000 one. On a $400,000 home, those fixed items alone run about 0.2%–0.4% of price, before a single percentage-based fee — title insurance, transfer tax, origination points — is added on top.

At $400,000, this is roughly the crossover point in this series. Fixed dollars and percentage-based fees carry closer to equal weight here than at either end of this price range, so the flat 3% midpoint used in the table below is a fairer approximation at this price than it is at the cheaper or pricier end of this series.

Estimate the transfer-tax and title portion for your own state with our closing costs calculator rather than relying on the $12,000 midpoint used for the worksheet below.

Earnest money

When your offer is accepted, you put down earnest money — a good-faith deposit typically 1%–3% of the price, about $4,000–$12,000 on a $400,000 home (more in competitive markets). This is not an extra cost: it is held in escrow and credited toward your down payment and closing costs at settlement. You do, however, need it available earlier than closing day, so count it as cash you must have on hand up front.

Cash reserves lenders expect

Lenders look at reserves — savings you still have left after closing, measured in months of PITI (Principal, Interest, Taxes, and Insurance: your full monthly payment, not just principal and interest). For a primary residence, the required amount is often zero — it's set case by case through automated underwriting, the software lenders run your file through to decide what to ask for. That does not mean zero is a safe number to plan around: it means the requirement won't stop you, but a thin cushion still will if a bill lands the same month as your first mortgage payment.

A workable first-time-buyer target is 2–3 months of PITI held back after closing. On this $400,000 home, the full monthly payment at 20% down runs about $2,606 (principal, interest, property tax, and insurance together — the full breakdown is just below), so 3 months of reserves is roughly $7,818, on top of your cash to close. That is a different, and more useful, number than the 6-months-of-reserves rule Fannie Mae's Selling Guide sets for investment properties — a rule that does not apply if this is the home you plan to live in.

At this price, that reserve target is a moderate add-on to your cash to close — not trivial, but usually foldable into the same timeline as saving your down payment above. It sits between the lighter target at the cheaper end of this series and the more demanding one at the pricier end.

Your actual monthly payment, not just the cash

Everything above is a one-time number. The recurring one is PITI — Principal, Interest, Taxes, and Insurance — and it is what you are actually budgeting against every month, not the P&I-only figures in the down payment table. On the $400,000 home at 20% down and 6.58%, that full payment is about $2,606:

Illustrative national tax and insurance rates; your county and insurer will differ. Model your own with the mortgage calculator.

What income do you need to qualify?

Everything above assumes you already know you can afford this house. Running the same 28% front-end rule in reverse — at 20% down, 6.58%, and this price's own tax and insurance figures — a lender sizing your DTI (debt-to-income ratio, the standard term for the 28%/36% math used throughout this page) would want to see gross annual income of roughly $111,692 to clear the $2,606 monthly payment without other debt pulling the ratio higher. That is the missing half of this page: the cash gets you to the closing table, but the income is what gets your file approved in the first place.

That $111,692 sits close to HUD's FY2026 national median family income of $106,800, just above it. A single median earner is stretched at this price, so a dual income is the more realistic path in most of the country — a meaningfully higher bar than the cheaper end of this series, though still short of what the priciest home here requires.

See the full breakdown — by down payment, with the debt-to-income math worked out — on how much house you can afford on $120k or how much house you can afford on $100k, or check your own income and debts on the DTI calculator.

How long would a typical household take to save this?

Holding income fixed instead of price flips the down-payment math around. At HUD's FY2026 national median family income of $106,800, saving 10% of gross income a year — $10,680/yr — a median-income household would need about:

• 1.3 year to save 3.5% FHA down ($14,000) on this $400,000 home.
• 3.7 years to save 10% down ($40,000).
• 7.5 years to save 20% down ($80,000).

Just under a decade for 20% down at a median income is a long horizon. Most median-income buyers at this price will reasonably choose a 5%–10% down conventional loan and carry PMI rather than wait — this price sits in the middle of the series, both in save-time and in that trade-off. Compare that against your own savings rate on the down payment savings calculator.

First-year costs people forget

The cash need does not stop at the closing table. Budget for:

• Maintenance and repairs — a common rule is about 1% of the home's value a year, roughly $4,000 on a $400,000 home, squarely between the other two prices covered here.
• Moving — professional movers, deposits, and time off.
• Immediate furnishings and fixes — appliances, window coverings, and the small emergencies of a new place.
• Utility setup and HOA dues — connection fees and any first HOA payment.

When each dollar is actually due

The cash does not all come out at once, and knowing the sequence helps you keep it liquid at the right moments:

• At offer acceptance — earnest money ($4,000–$12,000) goes into escrow within a few days. You need it liquid now, not at closing.
• During the process — the appraisal and home inspection are usually paid out of pocket up front (roughly $300–$600 each), before closing.
• Three days before closing — your Closing Disclosure states the exact cash to close. Confirm the wire details directly with the settlement agent to avoid wire fraud.
• At closing — the balance (down payment plus remaining closing costs, minus your earnest deposit and any credits) is wired or brought as a cashier's check.

How rates change these numbers

The cash to buy a $400,000 home barely moves with interest rates — your down payment and closing costs are set by the price, not the rate. What the rate changes is the monthly payment, and therefore how much house you can carry. At the current Freddie Mac 30-year average of 6.58%, the monthly principal and interest on this home ranges from $2,039 (20% down) to $2,473 (3% down) in the table above. If rates fall, that payment drops for the same cash outlay; if they rise, it climbs. A one-point rate move shifts that payment by a middling dollar amount relative to the other two prices covered here. Because the payment — not the upfront cash — is usually what stretches a budget, size it first with our affordability calculator and model the exact figure on the mortgage calculator.

The bottom line: cash to close

Your cash to close is the down payment plus closing costs (earnest money is already counted inside it). Using a 3%-of-price closing estimate on a $400,000 home:

Illustrative: assumes closing costs at the 3% midpoint of the CFPB's 2%–5% range. Reserves and first-year costs are additional. Your Loan Estimate is the authoritative figure.