Do You Need 20% Down to Buy a House? Average Down Payments Explained

Many buyers assume they need 20% down to buy a home. For some, that belief alone is enough to delay homeownership for years. On a $350,000 home, a 20% down payment is $70,000 — and for most households, saving that much cash can feel impossible.

The good news is that 20% down has never been a requirement. It’s a long-standing guideline, not a rule, and most buyers today are purchasing homes with far less.

Key takeaways

• Most first-time home buyers put down far less than 20% — around 9–10% on average — showing that a large down payment isn’t required.

• Putting down less than 20% may increase your monthly payment through mortgage insurance, but that cost is often temporary.

• The best down payment is one that fits your financial situation without draining your savings or delaying homeownership unnecessarily.

  
  

Do I Have to Put 20% Down on a House?

No. While 20% is often considered ideal, most buyers today put down less. According to recent data from the National Association of Realtors, the median down payment for first-time home buyers is just about 10%, the highest level seen in decades, while repeat buyers tend to put down even more.

How much you need to put down depends on several factors, including the price of the home and the type of loan you choose. Many conventional mortgages allow qualified buyers to purchase with as little as 3% down, while FHA loans require 3.5%. Some buyers may even qualify for loans that require no down payment at all.

Most first-time buyers don’t put 20% down. The average is closer to 9%–10%, according to the National Association of Realtors.

Why Does 20% Still Matter?

The reason 20% gets so much attention has less to do with approval and more to do with long-term cost. When you put down at least 20%, you typically avoid private mortgage insurance, often called PMI. PMI is an added monthly expense required when a lender finances more than 80% of a home’s value.

If you put down less than 20% on a conventional loan, PMI will likely be added to your payment. While that increases your monthly cost, it is usually temporary. Once you reach 20% equity through payments or appreciation, PMI can often be removed.

FHA loans include their own form of mortgage insurance, which works differently and may last longer depending on the terms of the loan.

Explore Down Payment Assistance Where You Live

Down payment assistance isn’t one-size-fits-all. Programs vary by state, and eligibility can depend on income, location, loan type, and whether you’re a first-time buyer. To make it easier to explore what may be available where you live, start with your state below:

Programs That Help with Down Payments and Closing Costs

If saving up for a big down payment feels daunting, there are actual programs designed to help buyers cover part or all of their down payment and closing costs. These come in several forms:

• Federal programs: Government-backed loan options like USDA, FHA, and VA loans may allow low- or no-down-payment financing for eligible buyers. While they may include mortgage insurance or fees, they are powerful tools that make homeownership possible for many.

• State and local assistance: Nearly every state and many cities/counties offer down payment assistance, grants, forgivable second-mortgages, or low-interest loans to help qualified buyers. These programs vary widely by location, income limits, and eligibility, but most are designed to help buyers bridge the gap between what they’ve saved and what they need.

Finding state and local assistance doesn’t have to feel overwhelming. A trusted mortgage lender can help you locate programs in your area and walk you through eligibility. Many buyers also find resources like Down Payment Resource, state housing agency websites, or local government housing departments useful for initial research.

A More Conservative Take on Down Payments

From a long-term financial perspective, putting down more money upfront is usually the stronger move. A larger down payment lowers the amount you borrow, reduces total interest paid over time, and gives you more flexibility in your monthly budget.

For first-time buyers, however, reaching 20% isn’t always realistic. In those cases, a down payment of 5% to 10% can still work (as long as the monthly payment fits comfortably within your income and you understand the tradeoffs).

*Note: If PMI is 1% of the total annual loan amount, the total cost of PMI here would be around $10,700 before it's cancelled after about 3.5 years of mortgage payments, when equity has reached 20%.

A smaller down payment usually means:

• A higher monthly mortgage payment

• Added costs like private mortgage insurance

• More interest paid overtime compared to a larger down payment

This is also where caution matters with very low or no-down-payment loans. Options like FHA, VA, and USDA loans can help buyers become homeowners sooner, but they often come with higher long-term costs through mortgage insurance, fees, or interest. These programs can be helpful tools in the right situation, but they are not automatically the least expensive option over the life of the loan.

Frequently Asked Questions

Here are straightforward answers to the most common questions homebuyers ask about down payments.

Do I really need 20% down to buy a house?

No. A 20% down payment is not required. While it can reduce costs, most buyers today purchase homes with less. According to national data, the average first-time home buyer puts down around 9%–10% percent.

What is the average down payment for first-time home buyers?

The median down payment for first-time home buyers is about 9%–10%. Repeat buyers tend to put down more, often closer to 20%, largely because they use equity from a previous home.

What happens if I put less than 20% down?

If you put less than 20% down on a conventional loan, you will typically pay private mortgage insurance (PMI). PMI increases your monthly payment, but it is usually temporary and can often be removed once you reach 20% equity.

How much is private mortgage insurance?

PMI costs vary based on your loan amount, credit profile, and down payment size. It is usually a small percentage of the loan balance and is paid monthly as part of your mortgage payment.

Can PMI be removed later?

Yes. On most conventional loans, PMI can be removed once you reach 20% equity through loan payments or home appreciation. FHA loans have different mortgage insurance rules that may last longer.

 

Are there loans that allow low or no down payment?

Yes. Some loan options allow buyers to purchase with a smaller down payment or none at all. These include certain conventional loans, FHA loans, VA loans for eligible service members, and USDA loans for qualifying rural properties. Each option has its own eligibility requirements and long-term cost considerations.

 

Are low-down-payment loans a bad idea?

Not necessarily. Low-down-payment loans can be helpful for buyers who have strong income but limited savings. However, they often come with higher long-term costs, such as mortgage insurance or additional fees, which should be weighed carefully.

 

Are there programs that help with down payments and closing costs?

Yes. Many buyers qualify for down payment and closing cost assistance through federal, state, and local programs. These may come in the form of grants, forgivable loans, or low-interest second mortgages.