{"id":70092,"date":"2026-05-18T08:14:26","date_gmt":"2026-05-18T15:14:26","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=70092"},"modified":"2026-05-18T08:14:26","modified_gmt":"2026-05-18T15:14:26","slug":"buyer-earnest-money-vs-down-payment","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/buyer-earnest-money-vs-down-payment\/","title":{"rendered":"Earnest Money vs. Down Payment: What\u2019s the Difference?"},"content":{"rendered":"<p>When buying a home, \u201cearnest money\u201d and \u201cdown payment\u201d are two terms you\u2019ll hear a lot early in the process. Because both involve paying money upfront, it\u2019s easy to confuse them, especially if this is your first time buying a house.<\/p>\n<p>However, they serve very different purposes:<\/p>\n<ul>\n<li aria-level=\"1\"><a href=\"https:\/\/www.homelight.com\/blog\/buyer-what-is-earnest-money\/\">Earnest money<\/a> is a good-faith deposit you submit shortly after your offer is accepted.<\/li>\n<li aria-level=\"1\"><a href=\"https:\/\/www.homelight.com\/blog\/buyer-what-is-a-down-payment\/\">A down payment<\/a> is the larger amount you pay at closing toward the home purchase itself.<\/li>\n<\/ul>\n<p>In this brief post, we\u2019ll take a closer look at how they compare, when they\u2019re paid, and how much you may need for each. We\u2019ll also provide two calculators to help you plan ahead.<\/p>\n<p>\n\n\n\n\n<div class=\"geo-cta widget-cta widget-cta--content     widget-cta--dark widget-cta--dark-blue-gradient\">\n    <div class=\"widget-element--content\">\n        <div class=\"widget-element--content-header\">\n            <img decoding=\"async\" alt=\"homelight logo\" class=\"widget-element--logo\" src=\"https:\/\/www.homelight.com\/blog\/wp-content\/themes\/ccprototypev5\/images\/logo-small-cta.png\" width=\"106\" height=\"25\" \/>\n        <\/div>\n        \n                <h3 class=\"cta-headline widget--bold\">Save thousands when buying a home<\/h3>\n                        <p>HomeLight-recommended real estate agents are top-tier negotiators who understand the market data that helps you save as much as possible when buying your dream home.<\/p>\n        \n                <div class=\"widget-element--buttons\">\n            <a data-type=\"In Content CTA\" href=\"https:\/\/www.homelight.com\/find-agent\/quiz\/buyer?#\/qaas=0\/\" class=\"cta-click-track widget-element--button\">Find a top buyer's agent<\/a>\n        <\/div>\n                    <\/div>\n<\/div>\n\n <div id=\"section--1\" data-toc-header=\"Earnest money vs. down payment\" data-toc-type=\"head\"><\/div><\/p>\n<h2>Earnest money vs. down payment at a glance<\/h2>\n<table>\n<tbody>\n<tr>\n<td><\/td>\n<td><strong>Earnest money<\/strong><\/td>\n<td><strong>Down payment<\/strong><\/td>\n<\/tr>\n<tr>\n<td>Purpose<\/td>\n<td>Shows the seller you\u2019re serious about buying<\/td>\n<td>Reduces the amount you borrow from your lender<\/td>\n<\/tr>\n<tr>\n<td>When it\u2019s paid<\/td>\n<td>Shortly after offer acceptance<\/td>\n<td>At closing<\/td>\n<\/tr>\n<tr>\n<td>Typical amount<\/td>\n<td>Around 1%\u20133% of the purchase price<\/td>\n<td>Often 3%\u201320% of the purchase price<\/td>\n<\/tr>\n<tr>\n<td>Where the money goes<\/td>\n<td>Held in an escrow account<\/td>\n<td>Paid toward the home purchase<\/td>\n<\/tr>\n<tr>\n<td>Refundable?<\/td>\n<td>Sometimes, depending on contingencies and contract terms<\/td>\n<td>Generally no, once the sale closes<\/td>\n<\/tr>\n<tr>\n<td>Applied toward your costs?<\/td>\n<td>Usually credited toward your down payment or closing costs<\/td>\n<td>Paid directly toward the home purchase<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<div id=\"section--2\" data-toc-header=\"What is earnest money?\" data-toc-type=\"head\"><\/div>\n<h2>What is earnest money?<\/h2>\n<p>Earnest money is the deposit you\u2019ll submit after a seller accepts your offer on a home. It\u2019s designed to show the seller that you are serious about moving forward with the purchase.<\/p>\n<p>The money is typically held in an <a href=\"https:\/\/www.homelight.com\/blog\/buyer-house-in-escrow-meaning\/\">escrow account<\/a> until closing. If the sale goes through, your earnest money is usually applied toward your down payment or closing costs.<\/p>\n<p>The amount can vary depending on the market and purchase price, but buyers commonly put down around <a href=\"https:\/\/www.homelight.com\/blog\/how-to-protect-earnest-money\/\">1% to 3% of the home\u2019s price<\/a> as earnest money.<\/p>\n<p>Your earnest money may be refundable if you back out for a reason covered by a <a href=\"https:\/\/www.homelight.com\/blog\/what-does-contingent-mean-in-real-estate\/\">contingency<\/a> in your purchase agreement, such as financing or inspection issues. But if you walk away from the deal for a reason not protected by your contract, you could lose your deposit.<\/p>\n<p>Want to estimate how much earnest money you may need? Use our calculator below.<\/p>\n<p><iframe title=\"HomeLight Earnest Money Calculator\" src=\"https:\/\/homelight-earnest-money-calculator.vercel.app\" width=\"775\" height=\"830\" frameborder=\"0\" scrolling=\"auto\"><br \/>\n<\/iframe><\/p>\n<div id=\"section--3\" data-toc-header=\"What is a down payment?\" data-toc-type=\"head\"><\/div>\n<h2>What is a down payment?<\/h2>\n<p>A down payment is the portion of your home\u2019s purchase price that you pay upfront at closing. The rest is typically financed through your mortgage loan.<\/p>\n<p>For example, if you buy a $400,000 home with a 10% down payment, you would pay $40,000 upfront and finance the remaining amount through your lender.<\/p>\n<p>The amount required depends on several factors, including:<\/p>\n<ul>\n<li aria-level=\"1\">Your loan type<\/li>\n<li aria-level=\"1\">Your credit score<\/li>\n<li aria-level=\"1\">Your lender\u2019s requirements<\/li>\n<li aria-level=\"1\">Your qualifications as a buyer<\/li>\n<\/ul>\n<p>Some loan programs allow qualified buyers to put down as little as 3%, especially certain conventional loans aimed at first-time or low- to moderate-income buyers. Others may require a larger down payment.<\/p>\n<p>Whether required or not, a larger down payment can help reduce your monthly mortgage payments and may help you avoid <a href=\"https:\/\/www.homelight.com\/blog\/what-is-pmi-can-you-get-rid-of-it\/\">private mortgage insurance<\/a> (PMI) on conventional loans. PMI is an additional monthly fee that lenders charge if your down payment is less than 20%.<\/p>\n<p>Use the calculator below to estimate what your down payment could look like based on different home prices and loan scenarios.<\/p>\n<p><iframe title=\"House Down Payment Calculator by HomeLight\" src=\"https:\/\/homelight-down-payment-calculator.vercel.app\/\" width=\"775\" height=\"780\" frameborder=\"0\" scrolling=\"auto\"><br \/>\n<\/iframe><\/p>\n<div id=\"section--4\" data-toc-header=\"How does earnest money apply?\" data-toc-type=\"head\"><\/div>\n<h2>Does earnest money count toward the down payment?<\/h2>\n<p>In most home purchases, earnest money is credited toward your down payment or closing costs.<\/p>\n<p>For example, let\u2019s say:<\/p>\n<ul>\n<li aria-level=\"1\">Your required down payment is $20,000<\/li>\n<li aria-level=\"1\">You already paid $5,000 in earnest money after your offer was accepted<\/li>\n<\/ul>\n<p>At closing, that $5,000 would typically be applied toward the total amount you owe, meaning you may only need to bring the remaining $15,000 for the down payment, plus any applicable closing costs.<\/p>\n<div id=\"section--5\" data-toc-header=\"Frequently asked questions\" data-toc-type=\"head\"><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Learn the difference between earnest money and a down payment, when each is paid, and how much you may need with simple calculators.<\/p>\n","protected":false},"author":298,"featured_media":70093,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","cybocfi_hide_featured_image":"","footnotes":""},"categories":[192,630,629],"tags":[],"class_list":["post-70092","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-for-buyers","category-down-payments","category-home-financing"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.0 (Yoast SEO v27.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Earnest Money vs. Down Payment: What\u2019s the Difference?<\/title>\n<meta name=\"description\" content=\"Learn the difference between earnest money and a down payment, when each is paid, and how much you may need with simple calculators.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.homelight.com\/blog\/buyer-earnest-money-vs-down-payment\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Earnest Money vs. Down Payment: What\u2019s the Difference?\" \/>\n<meta property=\"og:description\" content=\"Learn the difference between earnest money and a down payment, when each is paid, and how much you may need with simple calculators.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.homelight.com\/blog\/buyer-earnest-money-vs-down-payment\/\" \/>\n<meta property=\"og:site_name\" content=\"HomeLight Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/gohomelight\/\" \/>\n<meta property=\"article:published_time\" content=\"2026-05-18T15:14:26+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2026\/05\/sell-my-house-for-cash-in-washington-dc-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1000\" \/>\n\t<meta property=\"og:image:height\" content=\"563\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Richard Haddad\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@gohomelight\" \/>\n<meta name=\"twitter:site\" content=\"@gohomelight\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Richard Haddad\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Earnest Money vs. Down Payment: What\u2019s the Difference?","description":"Learn the difference between earnest money and a down payment, when each is paid, and how much you may need with simple calculators.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.homelight.com\/blog\/buyer-earnest-money-vs-down-payment\/","og_locale":"en_US","og_type":"article","og_title":"Earnest Money vs. Down Payment: What\u2019s the Difference?","og_description":"Learn the difference between earnest money and a down payment, when each is paid, and how much you may need with simple calculators.","og_url":"https:\/\/www.homelight.com\/blog\/buyer-earnest-money-vs-down-payment\/","og_site_name":"HomeLight Blog","article_publisher":"https:\/\/www.facebook.com\/gohomelight\/","article_published_time":"2026-05-18T15:14:26+00:00","og_image":[{"width":1000,"height":563,"url":"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2026\/05\/sell-my-house-for-cash-in-washington-dc-1.jpg","type":"image\/jpeg"}],"author":"Richard Haddad","twitter_card":"summary_large_image","twitter_creator":"@gohomelight","twitter_site":"@gohomelight","twitter_misc":{"Written by":"Richard Haddad","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":["Article","BlogPosting"],"@id":"https:\/\/www.homelight.com\/blog\/buyer-earnest-money-vs-down-payment\/#article","isPartOf":{"@id":"https:\/\/www.homelight.com\/blog\/buyer-earnest-money-vs-down-payment\/"},"author":{"name":"Richard Haddad","@id":"https:\/\/www.homelight.com\/blog\/#\/schema\/person\/7d7103b037dcb5e844946ec92b02a128"},"headline":"Earnest Money vs. Down Payment: What\u2019s the Difference?","datePublished":"2026-05-18T15:14:26+00:00","mainEntityOfPage":{"@id":"https:\/\/www.homelight.com\/blog\/buyer-earnest-money-vs-down-payment\/"},"wordCount":670,"publisher":{"@id":"https:\/\/www.homelight.com\/blog\/#organization"},"image":{"@id":"https:\/\/www.homelight.com\/blog\/buyer-earnest-money-vs-down-payment\/#primaryimage"},"thumbnailUrl":"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2026\/05\/sell-my-house-for-cash-in-washington-dc-1.jpg","articleSection":["Buyers","Down Payments","Financing"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.homelight.com\/blog\/buyer-earnest-money-vs-down-payment\/","url":"https:\/\/www.homelight.com\/blog\/buyer-earnest-money-vs-down-payment\/","name":"Earnest Money vs. Down Payment: What\u2019s the Difference?","isPartOf":{"@id":"https:\/\/www.homelight.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.homelight.com\/blog\/buyer-earnest-money-vs-down-payment\/#primaryimage"},"image":{"@id":"https:\/\/www.homelight.com\/blog\/buyer-earnest-money-vs-down-payment\/#primaryimage"},"thumbnailUrl":"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2026\/05\/sell-my-house-for-cash-in-washington-dc-1.jpg","datePublished":"2026-05-18T15:14:26+00:00","description":"Learn the difference between earnest money and a down payment, when each is paid, and how much you may need with simple calculators.","breadcrumb":{"@id":"https:\/\/www.homelight.com\/blog\/buyer-earnest-money-vs-down-payment\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.homelight.com\/blog\/buyer-earnest-money-vs-down-payment\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.homelight.com\/blog\/buyer-earnest-money-vs-down-payment\/#primaryimage","url":"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2026\/05\/sell-my-house-for-cash-in-washington-dc-1.jpg","contentUrl":"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2026\/05\/sell-my-house-for-cash-in-washington-dc-1.jpg","width":1000,"height":563,"caption":"Source: (jiawangkun\/ Depositphotos)"},{"@type":"BreadcrumbList","@id":"https:\/\/www.homelight.com\/blog\/buyer-earnest-money-vs-down-payment\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.homelight.com\/blog\/"},{"@type":"ListItem","position":2,"name":"Earnest Money vs. Down Payment: What\u2019s the Difference?"}]},{"@type":"WebSite","@id":"https:\/\/www.homelight.com\/blog\/#website","url":"https:\/\/www.homelight.com\/blog\/","name":"HomeLight Blog","description":"Real Estate Advice from America&#039;s Top Agents","publisher":{"@id":"https:\/\/www.homelight.com\/blog\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.homelight.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.homelight.com\/blog\/#organization","name":"HomeLight","url":"https:\/\/www.homelight.com\/blog\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.homelight.com\/blog\/#\/schema\/logo\/image\/","url":"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2017\/11\/logo-hr-color.png","contentUrl":"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2017\/11\/logo-hr-color.png","width":1348,"height":262,"caption":"HomeLight"},"image":{"@id":"https:\/\/www.homelight.com\/blog\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/gohomelight\/","https:\/\/x.com\/gohomelight","https:\/\/www.linkedin.com\/company\/homelight\/","https:\/\/www.youtube.com\/channel\/UCimugR9XF17-OZ7B9fNnxWw","https:\/\/en.wikipedia.org\/wiki\/HomeLight"],"description":"Everything you need to know to sell your house faster and for more money. Articles, guides, and advice from top agents all over the U.S.","email":"support@homelight.com","telephone":"(888) 688-0350","legalName":"HomeLight","foundingDate":"2012-01-01","numberOfEmployees":{"@type":"QuantitativeValue","minValue":"201","maxValue":"500"}},{"@type":"Person","@id":"https:\/\/www.homelight.com\/blog\/#\/schema\/person\/7d7103b037dcb5e844946ec92b02a128","name":"Richard Haddad","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.homelight.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/fbb89d16f303ea1de47fd69852400830b4a663ea6dbb4eecafbea5c1403da721?s=96&d=blank&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/fbb89d16f303ea1de47fd69852400830b4a663ea6dbb4eecafbea5c1403da721?s=96&d=blank&r=g","caption":"Richard Haddad"},"description":"Richard Haddad is the executive editor of HomeLight.com. He works with an experienced content team that oversees the company\u2019s blog featuring in-depth articles about the home buying and selling process, homeownership news, home care and design tips, and related real estate trends. Previously, he served as an editor and content producer for World Company, Gannett, and Western News &amp; Info, where he also served as news director and director of internet operations.","sameAs":["https:\/\/www.homelight.com","https:\/\/www.linkedin.com\/in\/richard-w-haddad"],"url":"https:\/\/www.homelight.com\/blog\/author\/richardhaddad\/"}]}},"_links":{"self":[{"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/posts\/70092","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/users\/298"}],"replies":[{"embeddable":true,"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/comments?post=70092"}],"version-history":[{"count":0,"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/posts\/70092\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/media\/70093"}],"wp:attachment":[{"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/media?parent=70092"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/categories?post=70092"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/tags?post=70092"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}