How much should I put down on a home in Los Angeles?

The question of how much to put down is one of the most common — and most misunderstood — aspects of buying a home in Los Angeles. The old conventional wisdom was that you needed 20% down, and while that’s still the gold standard for avoiding Private Mortgage Insurance (PMI), it’s far from the only option available to today’s buyers.

For a median-priced Los Angeles home at around $900,000, a 20% down payment means coming up with $180,000 in cash — a significant hurdle for many buyers. Fortunately, several programs make homeownership more accessible. Conventional loans can be obtained with as little as 3–5% down, FHA loans require just 3.5% for eligible buyers, and California’s CalHFA programs offer down payment assistance specifically designed for first-time buyers in the state.

When you put down less than 20%, lenders typically require PMI — Private Mortgage Insurance — which protects the lender if you default. PMI usually costs between 0.5% and 1.5% of the loan amount annually, which on an $800,000 loan adds up to $4,000–$12,000 per year. That said, PMI is not permanent — once you’ve built 20% equity in your home, you can request to have it removed.

A larger down payment offers real advantages beyond avoiding PMI. It lowers your monthly payment, reduces the total interest you’ll pay over the life of the loan, and makes your offer more competitive in a multiple-offer situation. In the Los Angeles market where bidding wars are common, sellers often favor buyers with larger down payments because they signal financial strength and lower risk of financing falling through.

The right down payment amount depends on your savings, monthly budget, how long you plan to stay in the home, and what programs you qualify for. Blayne Pacelli can connect you with experienced local lenders who will walk you through your options and help you find the strategy that makes the most sense for your unique situation.