What is 2.5% earnest money?
2.5% earnest money is a deposit equal to 2.5% of the purchase price, paid into escrow after the seller accepts your offer. On a $500,000 home that is $12,500. If the sale closes, the full amount is credited toward your down payment and closing costs.
2.5% of a $500,000 home
$12,500
Typical against the usual 1% to 3%
2.5% earnest money by home price
The earnest money calculator multiplies the price by the percent. Here is 2.5% on common prices, with the low and high ends of the usual range beside it. Each price links to its own page with every percentage.
| Home price | 2.5% deposit | 1% | 3% |
|---|---|---|---|
| $150,000 | $3,750 | $1,500 | $4,500 |
| $200,000 | $5,000 | $2,000 | $6,000 |
| $250,000 | $6,250 | $2,500 | $7,500 |
| $300,000 | $7,500 | $3,000 | $9,000 |
| $350,000 | $8,750 | $3,500 | $10,500 |
| $400,000 | $10,000 | $4,000 | $12,000 |
| $450,000 | $11,250 | $4,500 | $13,500 |
| $500,000 | $12,500 | $5,000 | $15,000 |
| $600,000 | $15,000 | $6,000 | $18,000 |
| $750,000 | $18,750 | $7,500 | $22,500 |
| $1,000,000 | $25,000 | $10,000 | $30,000 |
When is 2.5% earnest money common?
Two and a half percent is in the upper half of the usual range. Buyers reach for it when a home is getting attention and they want their offer to read as firm.
It puts more money at risk if the buyer breaks the contract outside a contingency, so it pays to know the contract deadlines before offering it.
How much to offer depends on the market, the price and what your purchase agreement says about refunds, including its inspection and appraisal contingencies. The guide on how much earnest money to put down walks through each factor.
How 2.5% compares with other deposits
On the same $500,000 home, every common earnest money percentage and where it sits against the usual range:
What 2.5% earnest money does at closing
Earnest money is not an extra cost. At closing it shows up as a credit, so it lowers the cash you still have to bring. With 20% down and closing costs estimated at 3%, a $500,000 purchase needs $115,000 in total. A $12,500 deposit leaves $102,500 due at closing. With 3.5% down, the deposit covers 71% of the down payment.
| Down payment | Down payment | With closing costs | Due after $12,500 credit | Deposit covers |
|---|---|---|---|---|
| 3% | $15,000 | $30,000 | $17,500 | 83% |
| 3.5% | $17,500 | $32,500 | $20,000 | 71% |
| 5% | $25,000 | $40,000 | $27,500 | 50% |
| 10% | $50,000 | $65,000 | $52,500 | 25% |
| 20% | $100,000 | $115,000 | $102,500 | 13% |
Earnest money vs down payment explains how the credit works, and when earnest money is refundable covers what happens if the sale does not close.
Work out 2.5% on your own price
The calculator below is set to 2.5%. Type in your price to see the deposit and the cash still due at closing.
At closing
Earnest money on a $500,000 home
$12,500
2.5% of the price
- Typical range (1% to 3%)
- $5,000 to $15,000
- Down payment (20%)
- $100,000
- Closing costs (3%, estimate)
- $15,000
- Earnest money credited
- −$12,500
- Cash still due at closing
- $102,500
If the sale closes, the deposit is credited to you. It covers 13% of a 20% down payment.
2.5% earnest money questions
How much is 2.5% earnest money on a $500,000 house?
$12,500. Multiply the price by 0.025 to get it. On a $300,000 house the same 2.5% is $7,500, and on $750,000 it is $18,750.
Is 2.5% a lot of earnest money?
No, it is inside the 1% to 3% range most agents quote, so sellers tend to see it as a normal deposit.
Do you get 2.5% earnest money back?
If the sale closes, it is credited toward your down payment and closing costs, so you get the value of it then. If the deal falls apart for a reason your contract allows, such as a failed inspection within the inspection period, it is normally refunded. If you back out for a reason the contract does not allow, the seller may be able to keep it.