How much should you put down on your next home when moving up?
There's no single right number. 20% down on a conventional loan avoids private mortgage insurance and lowers your payment, but putting every dollar of equity into the next home can leave you short on reserves, moving costs, and repairs. Many Pierce County move-up buyers land between 10% and 25% down, keep several months of expenses in cash, and check whether a larger down payment keeps them under the 2026 conforming loan limit of $1,063,750 in Pierce County. Run at least two scenarios with your lender before you decide.
When you sell a home you've owned for a while, you may walk away with a large check. The natural instinct is to put all of it into the next house.
Sometimes that's the right call. But in today's market — with rates around 7.40% (Freddie Mac, October 8, 2026) — the down payment decision deserves more thought than "as much as possible."
Here's how I help move-up households think it through. For the full picture on equity, financing, and timing, start with our Pierce County move-up strategy hub.
Step 1: Know what you'll actually net
Your equity is not the same as your cash. After commissions, Washington's real estate excise tax (REET), title, escrow, your loan payoff, and any repairs or credits, your net proceeds may be well below what an online estimate suggests.
Start with a written net proceeds estimate. Here's how to read a seller net proceeds estimate, and here's how to think about using home equity to buy your next home.
Step 2: Compare real scenarios
Here's an illustrative example on an $850,000 Pierce County home at 7.40%, 30-year fixed, principal and interest only. These are assumptions, not loan quotes.
| Down payment | Loan amount | Principal & interest | Mortgage insurance? |
|---|---|---|---|
| 10% ($85,000) | $765,000 | About $5,297/month | Yes — conventional PMI likely |
| 20% ($170,000) | $680,000 | About $4,708/month | No |
| 30% ($255,000) | $595,000 | About $4,120/month | No |
Moving from 10% to 20% down saves about $589/month in principal and interest — plus the PMI you'd likely pay at 10%. Moving from 20% to 30% saves about $588/month more, but it ties up another $85,000.
Property taxes, insurance, and any HOA dues come on top of these numbers.
Step 3: Weigh what each extra dollar buys
Reasons to put more down
- Avoid PMI. Conventional loans generally require private mortgage insurance below 20% down. Under federal law, you can usually request PMI removal once your balance reaches 80% of the original value, and it generally ends automatically at 78%, if you're current on payments.
- Lower monthly payment and less interest over time
- Stay under the conforming loan limit. In Pierce County, the 2026 limit for a one-unit home is $1,063,750. Loans above that are jumbo loans, which can have different rate, down payment, and reserve requirements. For higher-priced move-ups, a larger down payment can keep you conforming.
- Stronger offer. A larger down payment can make your offer more attractive, especially if the appraisal comes in tight.
Reasons to keep some cash
- Reserves. Lenders often want to see savings left after closing, and you'll want a cushion for life's surprises.
- Moving and setup costs. Movers, window coverings, appliances, furniture, and the first round of repairs add up fast.
- Carrying costs. If you buy before your current home sells, you may need cash to carry two homes for a while. Here's what to do if you buy first and your home doesn't sell.
- Flexibility. Money in your house is hard to access quickly without refinancing or a HELOC.
Step 4: Consider the recast option
Some move-up buyers put a smaller amount down to close, then make a large principal payment later — for example, after the old home sells — and ask the lender to recast the loan. A recast lowers the monthly payment while keeping your rate and term. It's common on conventional loans but generally isn't available on FHA or VA loans, and lenders set their own minimums and fees. Ask before you choose a loan.
A simple framework
Here's the order I suggest:
- Set your cash cushion first — enough for reserves, moving, and a few months of expenses.
- Set aside a repair and setup budget for the new home.
- Check the conforming loan limit if you're shopping above about $1.1 million.
- Target 20% down if it fits after steps 1–3, to avoid PMI.
- Put extra toward the down payment only if your cushion is solid and a lower payment is a priority.
Every household is different. Income stability, other debts, retirement savings, and how long you plan to stay all matter. Our guide on how much house you can afford in Pierce County helps you set the overall budget.
Frequently Asked Questions
Should I put all my home sale proceeds into my next house?
Not necessarily. A larger down payment lowers your payment and can avoid PMI, but keeping cash for reserves, moving costs, and repairs protects you from surprises. Many move-up buyers keep several months of expenses in savings after closing.
Do I need 20% down to buy a home?
No. Many conventional loans allow less than 20% down, but you'll usually pay private mortgage insurance until you reach about 20% equity. FHA and VA loans have their own down payment and insurance rules.
What is the conforming loan limit in Pierce County for 2026?
For a one-unit home, the 2026 conforming loan limit in Pierce County is $1,063,750. Loans above that amount are generally jumbo loans, which may have different requirements.
When does PMI go away on a conventional loan?
Under the federal Homeowners Protection Act, you can generally request PMI cancellation when your balance reaches 80% of the home's original value, and it usually ends automatically at 78%, as long as you're current on payments. Your servicer may have additional requirements.
What is a mortgage recast?
A recast lets you make a large payment toward principal and have your lender recalculate a lower monthly payment while keeping your rate and term. It's common on conventional loans but generally not available for FHA or VA loans.
Choose the down payment that fits your whole plan
The best down payment isn't the biggest one — it's the one that balances your monthly payment, your cash cushion, and your goals for the next home.
If you'd like help running side-by-side scenarios for your sale and purchase, schedule a move-up strategy conversation with The Barnard Group. We'll estimate your net proceeds and map the options with you and your lender.
About Josh Barnard
Josh Barnard is the founder of The Barnard Group and has spent over 20 years helping families navigate some of life’s biggest moments through real estate. Known for his “Work Hard. Be Kind.” approach, Josh combines expert market knowledge, innovative marketing, and genuine care to help homeowners make confident decisions about their next chapter. Whether someone is buying their first home, moving up, downsizing, or relocating to Pierce County, his mission is simple: serve people well, create unforgettable experiences, and help families build a life they love.
Researched October 5, 2026; rate updated October 9, 2026. Payment examples are illustrative and not loan offers. Confirm loan options with a licensed lender and your financial adviser.
