How Much Cash Do You Really Need to Buy a $400,000 House?

So how much cash do you need for a $400,000 house?

Plan on roughly $23,000 to $91,000 in cash to buy a $400,000 house, depending on how much you put down. The two moving parts are your down payment (anywhere from 3% to 20% of the price) and your closing costs, which typically run 2–5% of the price; the earnest money you already paid is part of that total, not an extra charge on top of it.

Here is the range at a glance, using a 30-year fixed at 6.49% (the national average for the week of July 9, 2026, per Freddie Mac's Primary Mortgage Market Survey) and about $11,200 in closing costs:

The number your bank actually wires on closing day is a little smaller than the last column, because your earnest money deposit is subtracted from it. More on that below. Everything here is an estimate meant to keep you unsurprised; your lender's Loan Estimate is where your real figures live.

The two numbers people confuse

"Total cash needed" and "cash to close" are not the same number, and mixing them up is the most common cash-planning mistake buyers make. Total cash needed is your down payment plus all your closing costs: the entire cash cost of the purchase. Cash to close is the wire on closing day: that same total, minus the earnest money you already paid and minus any seller or lender credits.

On the $400,000 house with 10% down, your total cash is about $51,187. But if you put down $4,000 in earnest money when your offer was accepted, the closing-day wire is closer to $47,187. The $4,000 didn't disappear; you spent it weeks earlier. If you want the line-by-line version of this distinction, we took it apart in cash to close vs. down payment.

What actually makes up the cash

Your cash breaks into two buckets: the down payment (your equity in the house) and closing costs (everything else). The down payment is simple arithmetic: price times your down-payment percentage. Closing costs are five stacked categories, and the Consumer Financial Protection Bureau lists the common ones:

• Lender fees: origination charges and any discount points you buy.
• Third-party services: appraisal, credit report, title insurance, settlement fee, survey, pest inspection.
• Government fees: recording fees and transfer taxes, which swing widely by state and county.
• Prepaids: in the CFPB's words, "property taxes, homeowners insurance, and interest until your first payment is due."
• Initial escrow deposit: a few months of taxes and insurance collected up front to seed your escrow account.

The last two ambush people. They aren't fees anyone is charging you; they're your own future taxes, insurance, and interest, collected early. Nobody quotes them while you're shopping, so they feel like a surprise at the closing table.

The worked example: $400,000, 10% down

Here is the arithmetic in full for the middle row of the table. Purchase price $400,000, 10% down, 30-year fixed at 6.49%, closing on the 20th of a 30-day month, with $4,000 in earnest money already paid. Every fee below is illustrative; yours will differ by lender, state, and county.

Step 1: Down payment and loan

• Down payment: $400,000 × 10% = $40,000
• Loan amount: $400,000 − $40,000 = $360,000

Step 2: Lender, third-party, and government fees

Step 3: Prepaids

• Prepaid interest: $360,000 × 6.49% ÷ 365 = $64.01 per day. Closing on the 20th leaves 11 days in the month: $64.01 × 11 = $704
• First-year homeowner's insurance premium: $1,700
• Prepaids subtotal: $2,404

Step 4: Initial escrow deposit

• Property taxes: $4,800/year ÷ 12 = $400/month, × 3 months collected = $1,200
• Insurance: $1,700/year ÷ 12 = $142/month, × 2 months collected = $283
• Escrow subtotal: $1,483

Step 5: Total closing costs

$7,300 + $2,404 + $1,483 = $11,187 (about 2.8% of the price, squarely inside the usual 2–5% range)

Step 6: The two cash numbers

• Down payment $40,000 + closing costs $11,187 = $51,187 total cash needed
• Minus earnest money already paid: −$4,000 = $47,187 cash to close (the wire)

So the honest answer for a $400,000 house at 10% down is: about $51,000 of your money, of which roughly $47,000 leaves on closing day and $4,000 left weeks earlier.

Cash needed at every down-payment level

The down payment drives almost the entire swing; closing costs barely move. Below is the same $400,000 house at each common down payment, with the monthly principal-and-interest payment for context (mortgage insurance and escrow are not included):

Two things fall out of this table. First, closing costs stay near $11,200 regardless of your down payment; they're driven by the price, the county, and your lender, not by your equity. Second, the trade is visible in the last two columns: putting 20% down instead of 3% costs about $68,000 more in cash today but saves roughly $429 a month. Whether that trade is worth it depends on what else that $68,000 could do, and on whether spending it leaves you a cushion, which brings up the number nobody prints.

Can you buy with less cash?

Yes: several loan programs cut the down payment well below 20%, and that is the fastest lever on the cash you need. The tradeoff is almost always a monthly cost or a higher price somewhere else.

• FHA loans let your "down payment [be] as low as 3.5% of the purchase price," per HUD: about $14,000 on a $400,000 house.
• Conventional loans backed by Fannie Mae and Freddie Mac start as low as 3% down for qualifying buyers: about $12,000.
• VA and USDA loans can require no down payment at all for eligible veterans and qualifying rural buyers; both are among the government-backed programs the CFPB describes.
• Down payment assistance: HUD notes that "state and local governments offer programs that can help" with the down payment. These carry their own eligibility rules and sometimes repayment terms, worth checking and reading closely.

Two honest caveats. Below 20% down you'll typically pay mortgage insurance, a monthly charge, so a smaller wire today buys a larger payment every month. And a seller credit toward closing costs shrinks the wire, but the CFPB is blunt that "the seller will usually require you to pay a higher price for the home in order to cover the costs of this credit." Less cash now, more loan for thirty years. That can be the right call when cash is your binding constraint; it is not free money.

The number nobody puts on the table

After you wire the cash to close, what's left in your account? That figure, your reserves after closing, is the one that decides whether a broken furnace in month two is an annoyance or an emergency, and it never appears on any disclosure form. A common rule of thumb is to keep several months of full housing payments in reserve after you close; some loan programs even require it. It's the reason "how much cash do I need" and "how much cash should I spend" are different questions. The most expensive way to buy this house is the one that leaves nothing behind it.

Before you write the offer

Put your real price and down payment in and read the cash line, not just the down payment: run your scenario through the Offer Buildr calculator and look at total cash and cash to close side by side. Then ask your lender for a Loan Estimate (the CFPB requires it within three business days of your application) and compare it line by line against the estimate above. The Loan Estimate is where the real fee numbers live; everything here is meant to get you close enough that nothing at the closing table is a shock.

Estimates, not appraisals · not legal or financial advice.