What is a good target percentage range to put down on a house?

A target percentage range of 10-20% for a down payment on a house strikes a balance between affordability and financial prudence. This range is often recommended because putting down at least 10% can help reduce monthly mortgage payments significantly and may allow the buyer to avoid private mortgage insurance (PMI), which is required for down payments below 20%.

Furthermore, a 10-20% down payment reflects a responsible approach to home financing, enabling buyers to retain some liquid savings for emergencies or unforeseen expenses while still demonstrating commitment to the purchase. This percentage is also commonly used by lenders when assessing risk; a down payment within this range shows financial stability and makes the mortgage approval process smoother.

In the context of other options, a down payment below 10% may lead to higher monthly payments and PMI, which is less favorable financially. Conversely, a down payment above 20% could be unnecessarily high for many buyers, potentially depleting savings that could be better allocated for investments or other financial goals. Therefore, the target of 10-20% balances the need for a responsible initial investment with the need to maintain financial flexibility.