How to Save For a House: Down Payments and Expenses

Saving money for a house requires planning for more than just a deposit, as buyers typically need to cover multiple upfront costs before completing a purchase. Alongside the down payment, costs such as closing fees, moving expenses, and building up a cushion for ongoing home maintenance can all impact how much you need to save.

Understanding these costs and building a clear savings plan can help you set realistic goals and avoid financial pressure when you’re ready to buy.

We take a look at the amount you’ll need to save, ways to plan your savings and other things to bear in mind.

Key findings

• Buyers need to plan for multiple upfront costs, including the down payment, closing costs, moving expenses, and a savings fund for ongoing home repairs, not just the deposit alone.
• Building a structured savings plan through budgeting, automating contributions, reducing expenses, and increasing income can help accelerate progress toward a home purchase.
• Setting a clear savings goal and timeline, while factoring in affordability and total costs, makes the process more manageable and realistic over time.

How much do you need to save for a house?

Most buyers need more than just a down payment saved before buying a home, as several upfront costs come into play during the purchase process such as closing costs, savings fund for home repairs, and moving expenses.

Factoring in all of these costs early can help you set a more realistic savings goal and avoid unexpected financial pressure when you’re ready to buy. ^[1] Let’s take a look at some of the most common costs to consider.

Down payment

A down payment is the percentage of your home's purchase price that you pay upfront when you close your home loan. It affects how much you need to borrow, your interest rate, and whether your lender will require you to pay private mortgage insurance (PMI). Typically, if you put down less than 20%, your lender will require PMI, which increases your monthly payments. Most lenders offer loan programs with down payments ranging from 5% to 20%. ^[2]

According to NAR's 2025 Profile of Home Buyers and Sellers, the median down payment was 10% for first-time buyers, 19% for all buyers, and 23% for repeat buyers. ^[3] That equates to roughly $40,880 for first-time buyers and $77,672 for all buyers based on median home price benchmarks. ^[4]

How much you need for a down payment depends on the purchase price of your home and the loan program you choose, as different loan programs require different percentages. ^[2]

Closing costs

Closing costs are the fees you pay when finalizing your mortgage and completing the home purchase. These can include lender fees, an appraisal, title services, and prepaid costs like homeowners' insurance and property taxes.

Closing costs typically range from 2% to 5% of the home’s purchase price and are paid at closing, in addition to your down payment. For example, on a $200,000 home, this would be around $4,000 to $10,000.

Because these costs are paid upfront and vary by loan and location, they should be included in your total savings goal, alongside your down payment. ^[1]

Moving expenses

Moving expenses are another upfront cost to factor in when saving for a home, and they can vary widely depending on distance, volume of belongings, and whether you hire professionals or move yourself.

On average, a local move costs around $1,400, while a long-distance move can cost about $5,450 when using professional movers (for a distance of 1,000 miles). These estimates are based on a 2-3 bedroom move of approximately 7,500 pounds.

To estimate your own costs, consider the distance of your move, how much you’re transporting, and whether you’ll need packing, storage, or additional services, as these can quickly increase the total. ^[5]

Home repairs

Home repairs are an ongoing cost of homeownership, so it’s important to budget for both routine maintenance and unexpected issues.

A common rule of thumb is to set aside 1% to 3% of your home’s value each year for maintenance costs, including repairs and replacements. ^[6] Setting aside money early can help you manage these costs and avoid financial strain after moving in.

How to save money for a house

Once you know your target figure, the next step is building a plan to get there. The strategies below work together: set a goal, open the right account, automate your contributions, reduce what you're spending, and look for ways to bring in more.

Set a savings goal and timeline

Before setting a savings target, it helps to understand what you can realistically afford. Using a home affordability calculator can give you an estimate of purchase price and monthly payments based on your income, debts, and down payment. Taking the number of bedrooms, square feet, and other features into account when calculating how much you need for your ideal house is important, as these will influence the purchase price and therefore the total amount you need to save. ^[6]

Once you have a clearer target, setting a timeline can help structure your savings plan. Breaking your goal into smaller milestones over time makes it easier to track progress and stay consistent as you work toward buying a home. ^[6]

Open a savings account

A savings account can be a practical place to keep money for a home because it offers a combination of safety, accessibility, and the ability to earn interest. Funds held at banks or credit unions can grow over time, and accounts may be federally insured up to set limits, helping protect your savings while you work toward your goal.

Savings accounts also allow you to access your money when needed, which can be important when preparing for a large purchase like a home. Some buyers choose high-yield savings accounts, which function like standard accounts but offer higher interest rates, helping savings grow more efficiently. However, savings accounts typically offer lower returns than other financial products, which can limit how quickly your money grows over time. ^[7]

Automate your savings

After deciding how much you want to set aside each month, contact your bank and authorize an automatic withdrawal from your primary account into a dedicated savings account. Your bank will move the money each month without requiring any manual action.

It is worth scheduling the withdrawal on payday or when you know sufficient funds will be in your account, as overdraft fees can quickly eat into what you have saved. ^[8]

Reduce your expenses

Before cutting anything, it helps to benchmark your spending against real data. According to the Bureau of Labor Statistics' Consumer Expenditure Survey, the average U.S. household spent $78,535 in 2024, broken down as follows:

Source: ^[9]

Reducing expenses can help increase how much you’re able to save each month, particularly if your spending broadly aligns with the categories above.

While housing and transportation often make up the largest share of spending and can be harder to change, areas like food, entertainment, and other non-essential purchases may offer more flexibility to cut back. Reviewing your spending, reducing discretionary costs, and making small, consistent adjustments can help free up more money to put toward your house savings over time. ^[10]

Find ways to earn more

Increasing your income can help you reach your savings goal faster, and it does not always require a major career change. Exploring opportunities within your current role, such as asking for a raise, working overtime, or making the most of employee benefits, can provide a steady boost to your income.

You could also consider additional income streams, such as a side gig or freelance work, to supplement your earnings. Directing any extra income straight into your house savings can help you make faster progress without it being absorbed into everyday spending. ^[11]

Create a budget

Creating a budget helps you understand how much you can realistically put toward a home while still covering your day-to-day costs and future plans. Many lenders use guidelines of around 30% of gross monthly income for housing costs and 36% for total debt, which can help set a benchmark when planning affordability.

Start by calculating your monthly spending across key areas such as housing, food, transportation, healthcare, and other essentials, while also factoring in upcoming expenses and upfront homebuying costs like your down payment and closing costs. Setting aside an emergency fund can help cover unexpected expenses. ^[12]

Budgeting methods can help structure this. For example, the 50/30/20 approach splits income between needs (50% of income), wants (30%), and savings (20%), aligning with the idea of keeping housing costs within a manageable share of your income while prioritizing savings for your home. ^[13]

Frequently asked questions

What is the minimum down payment required?

The minimum down payment depends on the lender and the type of loan. FHA loans are available with a minimum down payment of 3.5% for borrowers with a credit score of 580 or higher, or 10% for those with a credit score between 500 and 579. Some specialist programs offer lower down payments, with certain options such as VA loans for veterans and service members and USDA loans for eligible suburban and rural buyers requiring no down payment at all. ^[14]

For conventional loans, putting down less than 20% will typically require PMI as an additional monthly cost, which can add 0.5% to 2% of the total loan amount per year. Lower down payment options generally increase the total cost of the loan over time, as borrowers may pay more in interest and fees. ^[14]

How long does it take to save for a house?

Saving for a down payment can take several years, depending on income, savings habits, and local housing costs. Analysis of Home Mortgage Disclosure Act data across more than 180 markets, based on actual down payments and assuming households save 15% of their income each year, shows that buyers may take anywhere from 2 to 15 years to save for a home, with many markets falling in the 4 to 7 year range. ^[15]

The timeline can vary significantly by location and individual circumstances, meaning some buyers may reach their goal sooner, while others may need longer to save.

Sources

1. Consumer Financial Protection Bureau. “Figure Out How Much You Want To Spend,” https://www.consumerfinance.gov/owning-a-home/prepare/figure-out-how-much-you-want-to-spend/. Accessed on May 13, 2026.
2. Bank of America. "Down Payment on a House: How Much Do You Need?" bankofamerica.com/mortgage/learn/mortgage-down-payment. Accessed May 22, 2026.
3. National Association of Realtors. “NAR 2025 Profile of Home Buyers and Sellers Reveals Market Extremes,” https://www.nar.realtor/magazine/real-estate-news/nar-2025-profile-of-home-buyers-sellers-reveals-market-extremes. Accessed on May 13, 2026.
4. National Association of Realtors. “NAR Existing-Home Sales Report Shows 3.6% Decrease in March,” https://www.nar.realtor/newsroom/nar-existing-home-sales-report-shows-3-6-decrease-in-march. Accessed on May 13, 2026.
5. Moving.com. "Moving Cost Calculator." moving.com/movers/moving-cost-calculator.asp. Accessed May 22, 2026.
6. Citizens Bank. “How To Save for a House,” https://www.citizensbank.com/learning/how-to-save-for-a-house.aspx. Accessed on May 13, 2026.
7. Experian. “Pros and Cons of Savings Accounts,” https://www.experian.com/blogs/ask-experian/pros-and-cons-of-savings-accounts/. Accessed on May 13, 2026.
8. Rocket Mortgage. "How to Save for a House." rocketmortgage.com/learn/how-to-save-for-a-house. Accessed May 27, 2026.
9. U.S. Bureau of Labor Statistics. “Consumer Expenditures — 2024,” https://www.bls.gov/news.release/cesan.nr0.htm. Accessed on May 13, 2026.
10. Debt.org. “How To Cut Expenses,” https://www.debt.org/advice/how-to-cut-expenses/. Accessed on May 13, 2026.
11. Fidelity. “How To Make More Money,” https://www.fidelity.com/learning-center/smart-money/how-to-make-more-money. Accessed on May 13, 2026.
12. Freddie Mac. “Budget Guide,” https://myhome.freddiemac.com/blog/homebuying/budget-guide. Accessed on May 13, 2026.
13. Chase. “What Is the 50/20/30 Budget Rule?” https://www.chase.com/personal/banking/education/budgeting-saving/50-20-30-budget-rule. Accessed on May 13, 2026.
14. Experian. "How Much Is a Down Payment on a House?" experian.com/blogs/ask-experian/how-much-should-i-save-for-a-down-payment. Accessed May 22, 2026.
15. National Association of Realtors. “The Down Payment Clock: How Long It Takes To Buy a Home Market by Market,” https://www.nar.realtor/blogs/economists-outlook/the-down-payment-clock-how-long-it-takes-to-buy-a-home-market-by-market. Accessed on May 13, 2026.

About the author

Becca has over 10 years of experience as a content writer, working across various industries including finance, digital marketing, education, travel, and technology. Her work has been featured in publications including Forbes, Business Insider, AOL, Yahoo, GOBankingRates, and more.