One of the biggest myths in home buying is that you need 20% down. The truth is most buyers put down far less, and several loan programs are built specifically for smaller down payments.
Typical down payment minimums by loan type
- Conventional: as little as 3% down for many buyers
- FHA: 3.5% down with a credit score of 580 or higher
- VA: 0% down for eligible veterans, active duty, and surviving spouses
- Jumbo: often 10% to 20% depending on the loan amount and lender
What 20% actually gets you
Putting 20% down on a conventional loan lets you skip private mortgage insurance (PMI), which lowers your monthly payment. A larger down payment also means a smaller loan, less interest over time, and a stronger offer in a competitive market.
When a smaller down payment makes sense
If waiting to save 20% means years of rising rents and home prices, buying sooner with 3% to 5% down can be the smarter move. You can always pay PMI now and remove it later once you reach 20% equity.
Down payment assistance and gift funds can cover part or all of your down payment on many programs. Ask us what you may qualify for before assuming you need to save more.