Hey everyone, this week, we’re diving into one of the most common questions we hear from homebuyers: How much do I actually need for a down payment? You’ve probably heard the magic number of 20%, but the truth is, that figure is more of a myth than a rule. Depending on your loan type, credit profile, and personal goals, your ideal down payment could be much lower.

Let’s break this down with some common-sense clarity.

The Truth Behind the 20% Myth

Traditionally, putting down 20% meant you could avoid private mortgage insurance (PMI) and start your homeownership journey with strong equity. But in today’s market, very few buyers—especially first-time buyers—are putting down that much. That doesn’t mean they’re doing anything wrong. In fact, many smart borrowers are taking advantage of low down payment loan programs that make homeownership more accessible without compromising financial stability.

Down payments aren’t just about avoiding mortgage insurance or lowering your monthly payment—they also represent an opportunity cost. If you tie up a large chunk of your savings in a down payment, it may leave you with less cash on hand for home maintenance, emergencies, or other financial goals. In many cases, keeping your savings flexible is more valuable than hitting an arbitrary percentage.

Loan Programs That Make It Possible

The amount you need for a down payment depends largely on the loan program you choose. For example, a conventional loan can require as little as 3% down, especially if you’re a first-time buyer. FHA loans, backed by the Federal Housing Administration, are popular for buyers with lower credit scores or limited savings, typically requiring a minimum of 3.5% down. FHA loans often come with increased initial closings costs and a higher monthly FHA Mortgage Insurance Premium.

If you’re an active-duty service member, veteran, or eligible surviving spouse, a VA loan could allow you to buy with no down payment at all—without the need for mortgage insurance. Likewise, USDA loans offer 100% financing in qualifying rural and suburban areas, helping moderate-income buyers become homeowners with no upfront cash required.

Jumbo loans, which are used for higher-priced properties, generally require larger down payments—often 10% to 20% or more—and come with stricter qualification requirements. But for the average borrower, there are plenty of accessible, low down payment options that don’t require draining your savings.

Help Is Out There

If saving for a down payment feels overwhelming, you’re not alone—and there are resources to help. Many state and local governments, housing agencies, and even employers offer down payment assistance programs (DPAs). These can come in the form of grants, forgivable second loans, or deferred payment options that can significantly reduce the upfront cash you need.

Qualifying for these programs usually requires meeting certain income limits, completing a homebuyer education course, or purchasing in a designated area. But if you meet the criteria, they can make a big difference—especially when paired with a low-down-payment loan.

It’s worth having a conversation with your lender early in the process to explore what assistance might be available to you. A good loan officer will know which programs are active in your area and how to structure your loan to take advantage of them.

Making the Right Move

So how do you decide how much to put down? Start by looking at your full financial picture. Do you have emergency savings in place? Are you carrying high-interest debt that could be paid off instead? Are you planning to make home improvements or cover moving expenses after closing?

These are all valid reasons to put less down, even if you technically could afford more. On the flip side, if you’re focused on lowering your monthly payment, building equity faster, or avoiding mortgage insurance, then a larger down payment could be the smarter route. The key is making a decision that aligns with your overall financial strategy—not just what the old rules say you “should” do. Take time to assess the available products and associated costs. Ask detailed questions and seek clarity from your lender when considering the available options.

Common Sense Takeaway

There’s no one-size-fits-all answer when it comes to down payments. Some buyers win with 3% down and smart budgeting. Others are better off putting 10%, 15%, or even 20% down to reduce their monthly costs. What matters most is understanding your options, weighing the pros and cons, and choosing a path that fits your life—not someone else’s.