How much down payment do you really need for a house?

In a nutshell

Saving for a down payment on a home can be a significant financial challenge, but not all mortgages require them. The pervasive myth that you need 20% down to buy a home isn’t true, and in reality most people put far less down.

• The typical down payment for first-time homebuyers is 8% while repeat buyers put down about 19%, according to research from the National Association of Realtors (NAR).
• Home down payments vary greatly and depend on the property type, your loan program and your financial goals.
• A 20% down payment has advantages, such as no private mortgage insurance (PMI), lower monthly payments and more favorable loan terms.

Do you need a 20% down payment on a house?

Traditionally, a 20% down payment was regarded as an ideal goal, and it may still be required for some jumbo mortgages. However, the actual amount you need to put down on a home can be as little as 0% to 3% or 3.5%. This depends on many factors, including the type of loan you choose and your financial goals.

Typically, first-time homebuyers tend to be younger and aren’t earning as high of an income as older homebuyers, so they have less savings accumulated. Repeat buyers, on the other hand, may have considerable equity from their existing homes to put toward their next home’s down payment. First-time homebuyers put down an average of 8% for a home while repeat buyers put down about 19%, according to a 2023 report from NAR.

Related: First-time homebuyer's guide: Everything you need to know

First-time buyers, in particular, had to get somewhat creative to fund their down payments, with 11% using the sale of stocks or bonds, 9% relying on retirement savings and 2% turning to an IRA account or the sale of cryptocurrency, NAR reported.

Pros and cons of putting 20% down

It may be tempting to make the smallest down payment possible, especially because saving enough cash can be challenging and take time. Here are some benefits and drawbacks to consider of making a 20% down payment:

Can you buy a house without a down payment?

Yes, you may be able to buy a home without a down payment with some loan programs.

Some USDA loans, for example, don't require a down payment but are limited to homes located within USDA-eligible rural areas. Military borrowers who qualify for a VA loan aren’t required to make a down payment either.

However, putting zero down for a home might limit the home and loan types available to you. Homebuyers looking for the most opportunities to purchase in a competitive market may find their home choices severely limited and sellers might assume they don’t have the financial means to close the transaction. Having a decent-sized down payment opens up more possibilities.

What are the minimum down payment requirements?

Each loan type has its own rules for the down payment needed. These amounts are for qualified buyers. In addition to the down payment amounts, certain credit qualifications need to be met, and the home must also be financeable according to the program terms.

Lenders may have their own rules for approving mortgage applications, so what they look for in a down payment may not always be obvious. Last year, around 8% of declined mortgage applications were due to an insufficient down payment amount. Larger down payments may help you overcome any lender objections and get more favorable loan terms.

Down payment by home type

How much you’ll need for a down payment also depends on the type of home you buy.

• A primary residence, or the home you’ll live in most of the time, can have a down payment as low as 0% to 3.5%.
• A second or vacation home may require a down payment of between 5-10%, as it doesn't qualify for certain first-time or residential homebuying programs.
• Investment properties have the largest down payment requirements, more in line with the 20% down payment rule.

See the terms and conditions for the loan program you’re considering to determine exactly what you'll pay.

The AP Buyline roundup

In a 2024 NAR survey, 17% of homebuyers said that saving for a down payment is the most challenging part of the homebuying process. However, programs exist to help even those with modest means to overcome this obstacle. While you can put as little as 0% to 3.5% down for a home, your personal financial goals and abilities, loan program and home type will factor into the decision. Remember, a larger down payment can help you make a more compelling offer to sellers, especially in a competitive housing market.

Frequently asked questions (FAQs)

What is a realistic down payment for a house?

You should plan to have at least a 3% to 5% down payment unless you qualify for a government loan that doesn’t require one at all. However, if you want to increase your chances of getting your offer accepted and to get the best loan rates and terms, consider putting down more. A 20% down payment will help you avoid paying PMI.

What is the minimum down payment on a house?

The minimum down payment on a house is 0% for VA and USDA loans, 3.5% for FHA loans, 3% to 5% for conventional loans and 10% or more for jumbo loans.

Can I get assistance with my down payment?

If you don’t qualify for a zero-down mortgage program, you might still be able to get help with your down payment. Options may include housing grants, deferred-payment loans and down payment assistance programs from your state and local governments. Check with your local housing authority or lender for opportunities near you.

Why are down payments required by mortgage lenders?

Down payments help lenders reduce their investment risk in financing a home over a long repayment period in case you default. A down payment also signals to sellers that you’re a serious buyer. Some down payment rules are set by government agencies and their partners such as the USDA, VA, FHA, Federal Housing Finance Agency, Freddie Mac and Fannie Mae, which means individual lenders can’t accept lower down payments for certain programs.