Aim to spend 28% or less of your income on housing

Step 1: Determine how much you want to spend on a house.

The first step in how to save for a house is deciding how much house you want to buy. Gone are the days when a 20% down payment was the norm. But a down payment isn’t the only cash you’ll need when the time comes to close on a house. And there are long-term costs to consider, as well.

Immediate costs

When it’s time to close, here are things you’ll need money for:

  • Down payment (including earnest money)
  • Closing costs
  • Moving expenses
  • Inspections


Long-term costs

These costs can exist throughout your mortgage, and may change over time:

  • Homeowner’s insurance (possibly in an escrow account)
  • Property taxes (possibly in an escrow account)
  • Private mortgage insurance (PMI)
  • Utilities, repairs and maintenance

Do some calculating.

Use our mortgage affordability calculator to get a basic idea of how much you can afford to spend on a home. You can make calculations based on either your income or how much you’d like to pay each month.

Step 2: Decide what your down payment should be.

In 2021 the median down payment amount for first-time homebuyers was just 6%.1 Less than you thought, right? As you plan for your own down payment, it could be worthwhile to look into payment assistance programs, or if your lender offers existing customer credits.

Is a lower down payment okay for you?

Generally, the more you put down, the lower your interest rate and monthly payment. What down payment amount are you comfortable with?

Calculate your ideal down payment amount.

Our down payment calculator can help you decide how much you want to save as you prepare for the mortgage process.

What is down payment assistance?

There are many forms of down payment assistance designed to help eligible homebuyers cover down payment costs.

Get closer to your new home.

Are you ready to start taking steps toward a new home? If your answer is yes, get an estimate of what you may be able to borrow in just a few minutes or connect with a mortgage loan officer about your mortgage options

Step 3: Find a place to keep your down payment as you save.

When you’re saving money for a down payment, it’s a good idea to keep the money somewhere that’s easy to access – like a savings account. A certificate of deposit (CD) may provide a higher rate of return, but pay attention to the required term lengths and how they may impact your homebuying schedule. Here are some accounts to get you started.

Money Market Savings

Get up to a 4.50% Annual Percentage Yield (APY) on balances of $25,000 or more.2

Open a new Elite Money Market Account by October 9, 2023 and put your savings to work with up to a 4.50% APY.

CD Special

Promotional rates start at 4.55% APY for a 7-month term. Other rates and terms are available.3, 4, 5, 6, 7

A CD Special lets you earn more on your money than traditional savings accounts. Rates vary by term and location. Check yours before opening an account.

Standard Savings Account

Get fast, easy access to your money with a U.S. Bank Standard Savings account.

It’s a hassle-free way to save money. Open an account online in minutes with a minimum opening deposit of $25.

Step 4: Look for other ways to save money and cut back on spending.

Depending on your timeline, cutting back on vacations and eating out aren’t always the best ways to save for a house. Instead, make a plan and be strategic.


Where you keep your money matters.

There are a few types of accounts to choose from when it comes to saving money for a down payment on a house. Standard savings accounts and CDs (certificates of deposit) are just two such options.


How to pay down credit card debt

Along with saving for a down payment, having a good relationship with credit is important in buying a home and qualifying for the best interest rates. Here are some tips on paying down your credit card debt.


How much house is affordable?

A standard rule for lenders is that your monthly housing payment should not take up more than 28% of your income. However, home affordability is about more than just how much you can borrow.

Looking for more information on affordable homebuying?

Connect with coaches and mortgage loan officers, learn about mortgages you might not have heard about, and find answers to even more of your homebuying questions.

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Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, home equity and credit products are offered by U.S. Bank National Association. Deposit products are offered by U.S. Bank National Association. Member FDIC.

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  1. From the “2021 Home Buyers and Sellers Generational Trends Report”, published March 16, 2021, by the National Associations of REALTORS® Research Group.

  2. A minimum opening deposit of $100 is required to open a U.S. Bank Elite Money Market account. Interest rates are determined at the bank’s discretion and can change at any time. Between July 28, 2023 and October 16, 2023, open a new Elite Money Market account and receive an Annual Percentage Yield (APY) of 4.50% on balances at or above $25,000. Balances below $25,000 will receive the standard variable interest rate in effect at the time. The following total account balance tiers and APYs are accurate as of July 28, 2023 and are dependent on geographical area: Under $10,000: 0.01% or 0.05%; $10,000 to $24,999.99: 0.01% or 0.05%; $25,000 to $49,999.99: 4.50%; $50,000 to $99,999.99: 4.50%; $100,000 to $499,999.99: 4.50%; $500,000 and above: 4.50%. Interest will be compounded daily and credited to your savings account monthly. Fees could reduce earnings on the account.

    This offer is applicable to accounts opened at the participating branch, within U.S. Bank footprint, over the phone or online. Current U.S. Bank employees are eligible.

    Other restrictions may apply. All regular account opening procedures apply. For a comprehensive list of account pricing, terms and policies, see the Your Deposit Account Agreement (PDF) and the Consumer Pricing Information (PDF) disclosure. These documents can be obtained by contacting a U.S. Bank branch or calling 800-872-2657.

  3. FDIC insured to the maximum allowed by law.

  4. $1,000 minimum opening deposit up to a maximum of $250,000. 

  5. Online application is not valid for single maturity CDs, business or retirement CDs, brokerage deposits, institutional investors, public funds or in conjunction with other promotional offers.

  6. Offer good for the initial term only. CD is automatically renewed for the same term. The rate is determined based on the published rate for the CD, excluding CD Specials, that is closest to but not exceeding the term of the CD. Advertised rate and APY are offered at the bank's discretion and may change daily.

  7. Annual Percentage Yield (APY) assumes principal and interest remain on deposit for the term of the certificate. All interest payments for the APY will be made at the end of the term or annually, whichever occurs first. Penalty will be imposed for early withdrawal. Fees could reduce earning on the account.

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