How Much Cash Do You Need to Buy a Home in Boston?

How much cash do you need to buy a home in Boston?

Most Greater Boston buyers need between 7% and 12% of the purchase price in liquid cash to close — covering the down payment, buyer closing costs, and earnest money deposits. On a $1,000,000 purchase, that's $70,000–$120,000. Massachusetts adds a few cash requirements that catch buyers off guard: a two-phase earnest deposit structure (a small amount at the Offer to Purchase, then typically 5% at the Purchase and Sale Agreement), required attorney fees at closing, and separate lender and owner's title insurance policies. First-time buyers earning up to $205,335 in eastern Massachusetts may qualify for MassHousing's $25,000 interest-free assistance — but the current program window closes July 31, 2026.

---

By Tyler Smith | Beacon & Bond Group | June 16, 2026

---

Your down payment is only part of the number.

Most buyers in Greater Boston focus on the down payment — 5%, 10%, 20% — and don't fully account for everything else that needs to be liquid before they close. Add up closing costs, earnest money deposits, and the cash reserves your lender requires, and the real cash figure is typically 7% to 12% of the purchase price.

On a $1,000,000 home, that's $70,000 to $120,000. On a $1,500,000 home, plan on $120,000 to $185,000 or more depending on your down payment and loan structure.

This isn't meant to scare you off. It's meant to make sure you're building toward the right number — not just the down payment — so nothing stalls when you're under contract.

---

Your Down Payment Options

Massachusetts lenders offer several paths to homeownership:

• 3% down — available on conventional loans for qualified first-time buyers; private mortgage insurance (PMI) is added to your monthly payment until you reach 20% equity
• 3.5% down — FHA loans; credit-score-flexible but adds mortgage insurance, often for the life of the loan
• 5–10% down — the practical range for most competitive Boston-area offers; reduces PMI exposure and signals stronger financial footing to sellers
• 20% down — eliminates PMI entirely and makes your offer the most compelling in a multiple-offer situation

In Greater Boston's $800K–$1.5M range, you don't need to put 20% down to win a home — but you do need a clean pre-approval from a reputable lender and the ability to move quickly. Well-priced homes in Boston, Brookline, Newton, and Needham are still going under contract in 15 days or less. I've helped buyers win at 5% down against higher down payment offers by pairing a strong pre-approval with clean contract terms.

One note if you're buying a condo: lenders evaluate the building as well as you. If you're putting less than 25% down, the building needs to meet Fannie Mae and Freddie Mac "warrantable" standards — meaning no pending litigation, no excessive investor concentration, and adequate reserves. Buildings that don't meet these standards may require 25% or more. 

---

Closing Costs for Massachusetts Buyers — What to Budget

Buyer closing costs in Massachusetts typically run approximately 2% of the purchase price. Here's what makes up the total:

Attorney fee — Massachusetts is an attorney-closing state. You'll hire a real estate attorney to represent you, review the title, and conduct the closing. Budget $900–$1,500 for a standard residential transaction; some attorneys charge more for complex or high-value deals.

Owner's title insurance — Optional but strongly recommended. This policy protects you against title defects that surface after closing — liens, errors in public records, forgery in the chain of title. The rate in Massachusetts is approximately $3.65 per $1,000 of purchase price, which comes to about $3,650 on a $1,000,000 purchase.

Lender's title insurance — Required by your lender to protect their loan position. Often issued simultaneously with the owner's policy at a discounted "simultaneous issue" rate.

Lender origination and processing fees — Varies by lender; typically 0.5% to 1% of the loan amount. Shopping multiple lenders before you lock can save you thousands here.

Appraisal — Ordered by your lender after your offer is accepted; typically $500–$800 in Greater Boston.

Prepaid items — These aren't fees in the traditional sense, but they're real cash you need at closing. They include the first year of homeowners insurance (typically $1,200–$2,500 annually in Greater Boston), two to six months of property tax escrow depending on your lender, and prepaid mortgage interest covering the partial first month after closing.

Recording fees — Massachusetts charges approximately $155 to record the deed and mortgage with the county Registry of Deeds.

On a $1,000,000 purchase with a 5% down payment, expect total closing costs of $20,000–$35,000 on top of your down payment. If your lender offers a "no-closing-cost" loan, they're rolling those fees into a slightly higher rate — you're still paying them, just over time.

---

The Earnest Money Timeline — What Massachusetts Buyers Need to Know

This is the piece that most frequently catches buyers off guard.

Massachusetts uses a two-step contract process. The Offer to Purchase (OTP) comes first — this is a legally binding document. The Purchase and Sale Agreement (P&S) follows roughly 7-10 days later. Each step has a deposit, and you need to have that cash available before closing day, not on it. 

Here's the typical structure:

At the Offer to Purchase: Most buyers put down $1,000 to $5,000 when they sign the OTP. This signals good faith and puts the home under contract.

At the Purchase and Sale Agreement: The standard follow-up deposit in Greater Boston is 5% of the purchase price. On a $1,000,000 home, that's $50,000 — due within 7-10 days of your offer being accepted.

Both deposits are credited toward your down payment and closing costs at closing. You're not losing this money — but you need to have it liquid and accessible within days of going under contract, not just on closing day.

The P&S deposit is held in an attorney's escrow account or the listing brokerage's trust account. It's protected — but it's committed. If you back out after the P&S is signed without a valid contingency, you can lose that deposit.

---

Cash Reserves — What Lenders Expect

Your lender will want to see reserves — liquid savings remaining in your account after your down payment and closing costs are paid. Most conventional and jumbo loan programs require two to six months of your total housing payment (principal, interest, taxes, and insurance — commonly called PITI).

For a $1,000,000 purchase at today's rates:

• Monthly P&I on a $950,000 loan at 6.5%: approximately $6,000
• Add property taxes and homeowners insurance: typically $1,500–$2,500/month depending on the town
• Estimated PITI: $7,500–$8,500/month

Two to six months of reserves: $15,000–$51,000, depending on your lender and loan program.

Plan for this before you think you're "ready." The buyers who scramble most at closing are the ones who correctly saved for the down payment and closing costs — but didn't anticipate the reserves requirement. Liquidating investments or borrowing from family days before closing is stressful and can affect your loan approval.

---

First-Time Buyer Programs Worth Knowing

If you haven't owned a primary residence in the last three years, two programs deserve your attention right now:

MassHousing $25,000 Assistance (Time-Sensitive): MassHousing is currently offering up to $25,000 at 0% interest with deferred repayment for eligible buyers who close on a MassHousing mortgage by July 31, 2026. The income limit for eastern Massachusetts is $205,335. This won't cover the full cash requirement on a $900,000 home, but it meaningfully reduces what you need to bring to closing — and it's interest-free. If you're close to this income threshold and are buying this summer, it's worth a conversation with a MassHousing-approved lender today. [Details and eligibility at masshousing.com.]

ONE Mortgage Program: Available through qualified Massachusetts lenders; requires just 3% down with no private mortgage insurance. For buyers who qualify, this is one of the most efficient financing tools in the state.

One+Boston: A City of Boston program offering reduced mortgage rates and down payment assistance for income-eligible first-time buyers purchasing within city limits.

If you earn above the income limits — which is common for buyers in the $750K–$3M range — you won't qualify for these programs. But they're worth knowing about for first-time buyers at every price point.

---

What the Total Cash Requirement Actually Looks Like

Three scenarios at different price points, all with 5% down and approximately 3% in closing costs:

The P&S deposit is credited toward your down payment at closing — it's part of the total, not in addition to it. Cash reserve requirements above are not included in these estimates.

Every situation is different. The actual number depends on your loan program, lender, down payment amount, and which town you're buying in. Property taxes vary significantly across Greater Boston — Brookline's median annual tax bill was $20,492 for a single-family home in fiscal 2026, while other towns in Norfolk County run considerably lower. Running a specific cash-to-close estimate before you start searching is one of the most important things you can do before you write your first offer.

Your specific number depends on your home's price, location, financing, and timing — that's exactly what I work through with every buyer before we go under contract.

---

Frequently Asked Questions

How much earnest money is standard when buying a home in Boston?

Most Greater Boston buyers put down $1,000–$5,000 at the Offer to Purchase, followed by a P&S deposit of approximately 5% of the purchase price — due within 7-10 days of offer acceptance. On a $900,000 purchase, that P&S deposit is $45,000. Both amounts are credited toward your down payment at closing, so they're part of your total cash requirement rather than a separate expense on top of it.

Can I use gift funds for my down payment in Massachusetts?

Yes — most loan programs allow gift funds from family members with proper documentation. Your lender will require a signed gift letter and a documented paper trail showing the transfer. FHA, conventional, and jumbo loans each have slightly different gift documentation requirements, so confirm specifics with your lender early in the process.

Do buyers or sellers pay closing costs in Massachusetts?

Both parties pay closing costs, but for different items. Sellers in Massachusetts pay the deed excise tax ($4.56 per $1,000 of sale price), their own agent's commission, and typically the smoke/CO detector certificate. Buyers pay attorney fees, title insurance, lender charges, and prepaid items. In some transactions, buyers negotiate a seller credit toward their closing costs — but this is less common in competitive Boston-area markets where sellers already have leverage.

What is the minimum down payment to buy a home in Boston?

The minimum is 3% on a conventional loan for first-time buyers, or 3.5% on an FHA loan. For investment properties or non-owner-occupied purchases, minimum requirements are higher — typically 15–25%. In Greater Boston's $800K–$1.5M segment, buyers can put down 5–10% to balance competitiveness with keeping cash available for reserves and closing costs.

Does MassHousing's $25,000 program apply in Greater Boston suburbs like Newton, Needham, and Brookline?

Yes — MassHousing's current interest-free assistance program is available statewide, including all of Greater Boston. The income limit for eastern Massachusetts is $205,335 (135% of area median income), and you must use a MassHousing mortgage product. The current limited program window runs through July 31, 2026. At Boston-area price points, the $25,000 typically covers a portion of closing costs or supplements the down payment — it won't replace a full 5% deposit, but it's meaningful free money for eligible buyers.

---

Getting clear on your cash requirement before you start seriously searching is how you avoid getting caught off guard mid-transaction. Most buyers who run into trouble don't have an income problem — they have a liquidity timing problem.

If you want to map out your specific numbers — down payment scenario, estimated closing costs for the town you're targeting, and what to expect at each stage — reach out anytime at tyler@beaconandbondgroup.com.

---

About Tyler Smith | Beacon & Bond Group

Tyler Smith is the founder of Beacon & Bond Group and a licensed REALTOR® with Real Broker MA, LLC, specializing in Boston, Brookline, Newton, Needham, Dedham, and Milton. Since 2020, he has represented more than 80 clients across $80 million in transactions — with hands-on experience as both a listing agent and a real estate investor. Connect with Tyler at tyler@beaconandbondgroup.com.