If you are trying to figure out the down payment to buy a house in San Diego, you have probably heard the scary number: 20 percent. On a $1 million county median, that is $200,000 in cash — and it stops a lot of good buyers before they ever start. Here is the part nobody tells you loudly enough: 20 percent down is a myth for most buyers. I write loans in San Diego every week for people who put down far less and still bought a great home.
Quick answer
- VA loan: 0% down for eligible veterans and active-duty service members.
- FHA loan: 3.5% down (about $31,500 on a $900,000 home).
- Conventional: as little as 3–5% down, with removable PMI.
- 20% down avoids PMI — but it is a choice, not a requirement.
- San Diego County’s 2026 conforming limit is $1,104,100, so even a median-priced home can often be financed without a jumbo loan.
Where San Diego prices actually sit in 2026
The San Diego County median home price was $1.02 million in July 2026, down slightly from June’s $1.05 million peak, according to local market reporting. The 30-year fixed averaged 6.66% the week of July 30, 2026 per Freddie Mac’s Primary Mortgage Market Survey. So the real question is not “can I save $200,000?” It is “which loan program fits my cash, my timeline, and my monthly comfort zone?”
Down payment options side by side
Here is what different down payments look like on a $900,000 San Diego home — a realistic entry point for a townhome or a detached home in many neighborhoods. Payments below are principal and interest only at 6.66%; taxes, insurance, PMI, and any HOA are on top.
| Program | Min. down | Down payment ($) | Loan amount | Est. P&I @ 6.66% |
|---|---|---|---|---|
| VA (eligible vets) | 0% | $0 | $900,000 | ~$5,783 |
| FHA | 3.5% | $31,500 | $868,500 | ~$5,581 |
| Conventional (low-down) | 3% | $27,000 | $873,000 | ~$5,610 |
| Conventional | 5% | $45,000 | $855,000 | ~$5,494 |
| Conventional | 10% | $90,000 | $810,000 | ~$5,205 |
| Conventional | 20% (no PMI) | $180,000 | $720,000 | ~$4,627 |
Look at the gap between 3% and 20%: the monthly difference is roughly $980, but the cash-in-the-door difference is $153,000. For a lot of buyers, keeping that cash — for reserves, repairs, or simply peace of mind — is worth carrying PMI for a few years until you refinance or hit 20% equity.
Once you’ve settled on the down payment, the next lever is what you ask the seller for. In today’s market that choice is worth real money — here’s the math on a rate buydown vs. a price reduction in San Diego, where the same $20,000 credit can save you $103 a month or $339.
What about PMI — is it really that bad?
Private mortgage insurance gets a worse reputation than it deserves. On a conventional loan it is removable — once you reach about 20% equity, you can request cancellation, and it drops automatically at 22%. In a market where San Diego values have trended up over time, many buyers reach that mark faster than they expect. PMI is the price of buying now instead of waiting three years to save a bigger pile of cash while prices and rents keep moving.
The best down payment is not the biggest one you can scrape together — it’s the one that gets you into the right home while keeping your reserves intact.
Conforming, high-balance, and jumbo — why it matters here
San Diego is expensive enough that loan limits change your options. For 2026, the county conforming limit is $1,104,100 for a single-family home, with a high-balance tier starting at $832,750. Borrow above $1,104,100 and you are in jumbo territory, which usually means a larger down payment and tighter guidelines. That single number is why so many San Diego buyers land right around a median-priced home — it is the ceiling for the most flexible financing.
Frequently asked questions
Do I need perfect credit to put less down?
No. FHA is built for buyers with lighter credit, and conventional 3–5% down programs work for many first-time buyers. Your rate and PMI cost scale with your score, so it is worth knowing where you stand before you shop.
Can I use gift funds for the down payment?
Often yes — FHA and many conventional programs allow documented gifts from family. The key is a clean paper trail, which we set up before you write an offer.
Is it smarter to wait and save 20%?
Run the math both ways. Waiting saves PMI, but you are betting against rent, price movement, and rate changes for the years it takes to save. For many buyers, a lower down payment now beats a bigger one later.
Let’s find your real number
Before you fall in love with a listing, let’s pin down the down payment and monthly payment that actually fit your life. It takes about 15 minutes.
Ron Berg · NMLS #974839 · C2 Financial Corp. NMLS #135622 · CA DRE #01821025. Licensed in CA, NV, AZ, MD. Payment examples are principal and interest only at a 6.66% rate for illustration; they exclude property taxes, homeowners insurance, PMI, and HOA dues, and are not a commitment to lend. Loan limits, rates, and program guidelines change — figures current as of August 2026. Equal Housing Opportunity.