Down Payment Requirements Vary More Than You’d Think
The idea that you need 20% down to buy a home is one of the most common myths in home buying. Many conventional loans allow down payments as low as 3%, and FHA loans allow as little as 3.5% for qualifying buyers. The tradeoff is that a smaller down payment usually means paying private mortgage insurance (PMI) until you build enough equity, which adds to your monthly cost — 20% down remains the threshold most lenders use to waive that requirement.
How much you should put down depends on a few things:
- Available savings — putting down more than you can comfortably afford can leave you without a financial cushion
- PMI cost — worth comparing against the opportunity cost of a larger down payment
- Loan type — minimum down payment requirements vary by loan program
Our home down payment calculator shows how different amounts change your monthly payment, and our home deposit calculator can help you work out a savings target before you start house hunting.