How Much Down Payment Do You Really Need?

The biggest myth in homebuying is that you need 20% down. Most buyers put down far less, and millions of people buy homes every year with 3% to 5% down.

What Most Buyers Actually Put Down

The median down payment for first-time buyers hovers around 6% to 7%. For repeat buyers, it's closer to 16%. But medians don't tell your story — your loan program does.

• FHA loans: 3.5% down minimum
• Conventional loans: 3% down with Fannie Mae or Freddie Mac
• VA loans: 0% down for eligible veterans
• USDA loans: 0% down in rural areas

These are the real numbers. You don't need 20%. You need a plan.

What Your Down Payment Actually Covers

Your down payment is just the first chunk of equity. It reduces the lender's risk and determines whether you'll need mortgage insurance. A bigger down payment means a smaller monthly payment, but waiting years to save 20% often costs more in rising home prices than it saves.

On a $350,000 home, 3% is $10,500. At 20%, it's $70,000. That extra $59,500 in savings could take a decade to accumulate. In that same decade, home prices could easily climb another $100,000.

The Bottom Line

Your ideal down payment is whatever lets you buy now without being house-poor. Run the numbers with a lender, compare programs, and pick the down payment that gets you in the door — not the one that looks good on paper.