Should I wait until I have a large down payment?
Last Updated: Thursday, Jun 25, 2026
The Answer
The best down payment is one that fits your financial situation without draining your savings or delaying homeownership unnecessarily. In fact, most first-time home buyers put down far less than 20%.
Many conventional mortgages allow qualified buyers to purchase with as little as 3% down, while FHA loans typically require 3.5% down. And some buyers may even qualify for loans that require no down payment at all.
The reason 20% gets so much attention has more to do with the long-term cost of the home loan. There are state and federal down payment assistance programs designed to help buyers cover part or all their down payment and closing costs.
A smaller down payment usually means:
- A higher monthly mortgage payment
- Added costs like Private Mortgage Insurance (PMI)
- More interest paid over time compared to a larger a down payment
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