Published October 22, 2026
What It Really Costs to Buy a $450,000 Home: 20% Down vs. 5% Down vs. FHA
On a $450,000 home, putting 20% down takes about $103,500 in cash and costs about $3,100 a month in Pennsylvania. Putting 5% down, or 3.5% with FHA, cuts the cash you need to roughly $30,000–$36,000, but the monthly payment rises to about $3,800.
One of the first questions buyers ask our team is "How much do I really need?" The honest answer is that it depends on your loan, your down payment and which side of the Delaware you buy on. Below we've run the numbers for the three options we see most often in Bucks, Montgomery and Hunterdon Counties, using today's rates.
The numbers side by side
| 20% down (conventional) | 5% down (conventional) | 3.5% down (FHA) | |
|---|---|---|---|
| Down payment | $90,000 | $22,500 | $15,750 |
| Loan amount | $360,000 | $427,500 | $441,849 (includes the 1.75% upfront MIP) |
| Interest rate (estimate) | 7.32% | 7.32% | about 7.00% |
| Principal and interest | $2,473 | $2,937 | $2,940 |
| Mortgage insurance | $0 | about $214 (PMI) | about $199 (FHA MIP) |
| Property tax, PA (about 1.35%) | $506 | $506 | $506 |
| Homeowners insurance (estimate) | $125 | $125 | $125 |
| Monthly payment, PA | about $3,104 | about $3,782 | about $3,770 |
| Monthly payment, NJ (about 2.2% tax) | about $3,423 | about $4,100 | about $4,089 |
| Cash to close (with about 3% closing costs) | about $103,500 | about $36,000 | about $29,250 |
All payments are for a 30-year fixed loan. The conventional rate is Freddie Mac's national average for the week of October 22, 2026. The FHA rate is an estimate, since FHA loans usually price a little below conventional. PMI is estimated at 0.6% of the loan a year and depends heavily on your credit score.
What each option really means
20% down (conventional). This gives you the lowest monthly payment and no mortgage insurance. It also makes your offer stronger, because sellers see a buyer with plenty of cash. The trade-off is that $100,000+ is a lot to tie up in one asset, so keep an emergency fund after closing.
5% down (conventional). With less than 20% down, a conventional loan carries private mortgage insurance (PMI). The good news is that PMI isn't forever. You can ask to remove it once you reach 20% equity, and it drops off automatically at 22%. Home value growth can get you there sooner.
3.5% down (FHA). FHA loans are easier to qualify for with a lower credit score or higher debt. They come with two kinds of mortgage insurance: a 1.75% upfront premium (usually added to the loan) and an annual premium of about 0.55%. With less than 10% down, FHA mortgage insurance lasts for the life of the loan. The only way out is to refinance later.
The surprise for most buyers: at this price, 5% conventional and 3.5% FHA end up within about $15 a month of each other. If your credit is strong, conventional often wins over the long run because the PMI goes away.
Pennsylvania vs. New Jersey: the same house, a different bill
On the same $450,000 house, property taxes cost about $300 more a month in New Jersey. Closing costs, though, are usually lower there for the buyer.
| Town or county | Effective property tax rate | Est. yearly tax on $450,000 |
|---|---|---|
| Bucks County, PA (average) | 1.31% | about $5,900 |
| Montgomery County, PA (average) | 1.35% | about $6,075 |
| Stockton, NJ | 1.95% | about $8,800 |
| Delaware Township, NJ | 1.95% | about $8,750 |
| Kingwood Township, NJ | 1.90% | about $8,550 |
| Alexandria Township, NJ | 2.20% | about $9,900 |
| Greenwich Township (Warren), NJ | 2.55% | about $11,450 |
| Frenchtown, NJ | 2.70% | about $12,150 |
| Milford, NJ | 2.94% | about $13,250 |
Closing costs. In Pennsylvania, the 2% realty transfer tax (1% state plus about 1% local) is usually split between buyer and seller. That adds about $4,500 to a buyer's costs on a $450,000 home. In New Jersey, the seller pays the realty transfer fee, and buyers only owe the "mansion tax" on homes over $1 million. Plan on roughly 2–4% of the price for closing costs either way, covering lender fees, title insurance, prepaid taxes and insurance.
One more NJ difference: after you sign a contract in New Jersey, there's a three-business-day attorney review period. Either side's attorney can propose changes or cancel during it.
Tax bills vary by assessment and school district, so always check the actual tax bill on any home you're considering.
Which option is right for you?
- You have the cash and want the lowest payment: 20% down.
- You have good credit but want to keep savings in the bank: 5% conventional, then drop PMI once you hit 20% equity.
- Your credit is still building, or your savings are tight: FHA at 3.5%. Ask about a seller credit toward closing costs.
- You're a veteran or buying in a rural area: ask about VA or USDA loans, which can mean 0% down. Parts of Upper Bucks and Hunterdon may qualify for USDA.
The best first step is a pre-approval from a local lender. It shows you your real rate and payment before you fall in love with a house.
Thinking about buying in Bucks, Montgomery or Hunterdon County? Call or text The William Waldman Team and we'll put together a personalized cost breakdown for the homes and towns you're considering. [team phone/contact link]
These figures are estimates as of October 22, 2026, for illustration only and are not a loan offer. Your rate, mortgage insurance, taxes and closing costs will depend on your credit, the lender and the property. Talk to a licensed loan officer for exact numbers.
