It's become common to arrange a mortgage as a full loan with no personal funds at all, but deciding how much of a down payment to make comes down to balancing your monthly payment, your total loan amount, and how much cash you want to keep on hand. In short, there's no single right answer for the size of your down payment — it's worth setting aside cash for closing costs separately, and prioritizing keeping an emergency fund on hand. How much you put down affects not just your monthly payment, but also how much financial cushion you have for future life events.
- Borrowing a full loan (atamakin zero) with no down payment has become common, but cash for closing costs is usually still needed separately.
- The more you put down, the smaller your total loan, which lowers your monthly payment and total interest paid.
- Keeping an emergency fund on hand (equal to a few months of living expenses, for example) can take priority over maximizing your down payment.
- As a guideline, closing costs for a pre-owned condo run about 6–9% of the purchase price.
- How much you put down should be considered together with how you're preparing for future life events, such as education costs or a career change.
Full Loan vs. Putting Down a Deposit
It's now common to take out a "full loan" (furu rōn) that covers the entire purchase price, meaning you can buy even without any personal funds. That said, a full loan means a larger total loan amount, which also increases your monthly payment and total interest paid. Putting down a deposit lowers your total loan and eases the repayment burden, but it also reduces the cash you have on hand — so which is better depends on your financial situation. Especially among dual-income households, more people are choosing a full loan precisely to keep cash on hand.
The Benefits of Putting Down a Deposit
Putting down a deposit reduces your total loan amount, which lowers both your monthly payment and total interest paid. It can also work in your favor during mortgage screening, since your loan-to-price ratio is lower. Even if rates rise in the future, a smaller total loan makes it easier to limit how much your payment increases. For higher-priced properties in particular, where the loan amount is larger, the difference in total interest paid with or without a deposit can add up to a meaningful sum.
The Risk of Putting Down Too Much
Putting down too large a deposit risks leaving you short of cash on hand, making it harder to handle unexpected expenses or life events. The common approach is to keep an emergency fund equal to a few months of living expenses on hand, and put only what's left over toward your deposit. Putting all of your personal funds into the deposit is something to avoid. Since unexpected expenses — replacing furniture and appliances, moving costs — tend to come up after buying a home, a financial plan with some margin is called for.
Set Aside Cash for Closing Costs Separately
Buying a home comes with closing costs beyond the purchase price itself — brokerage fees, registration costs, loan administrative fees, fire insurance premiums, and more. For a pre-owned condo, closing costs run about 6–9% of the purchase price as a guideline. Before thinking about your down payment, you need to set aside cash for these closing costs separately. For a new-build condo, the ratio of closing costs tends to be somewhat lower, at around 3–7% of the purchase price.
How to Decide on a Down Payment Guideline
There's no fixed right answer for the size of your down payment, but it becomes easier to decide if you work through it in this order: secure cash for closing costs, keep an emergency fund on hand, and put only what's left over toward your deposit. It's important to decide on an amount that doesn't strain your finances, taking future life events like education costs or a career change into account. Some lenders also tie preferential rates to the size of your down payment, so it's worth checking in advance.
Frequently Asked Questions
Can I get a mortgage with no down payment?
A full loan covering the entire purchase price has become common, so borrowing with no down payment is possible. That said, you'll still need to prepare cash separately for closing costs such as brokerage fees and registration costs.
How much do people typically put down?
There's no fixed guideline, but the common approach is to secure cash for closing costs, keep an emergency fund on hand, and put only whatever's left over toward the down payment.
Does a larger down payment help with mortgage screening?
Because it lowers your loan amount relative to the purchase price, it can work in your favor during screening. That said, screening criteria vary by lender.
Summary
The basic approach to your down payment is to secure cash for closing costs, keep an emergency fund on hand, and then decide on an amount that doesn't strain your finances. A full loan is one option, but keeping in mind that a down payment eases your repayment burden, make your decision based on your own financial situation.