More Borrowers Are Putting 20% Down - Should You?

If you're thinking about buying a home, you've probably heard you need a 20% down payment. But is that always true? Let’s take a closer look at what’s really required—and what’s possible for you.

Why 20% Is Still Popular

You might assume that large down payments are a thing of the past. But in recent years, more buyers have been putting down 20% or more. Here's why:

• Homes are selling quickly, and a larger down payment can help your offer stand out.
• In 2011, only 40% of buyers made a 20% down payment or more.
• By early 2021, that number rose to 48%.
• Even 28% of first-time buyers are now choosing to put down 20% or more.

But Most First-Time Buyers Don't Put 20% Down

While a 20% down payment has advantages, it's not the standard for everyone. In fact, the typical first-time homebuyer puts down just 7%. That’s a much more manageable amount for many people.

Why Some Buyers Choose to Put Down More

A larger down payment can benefit you by:

• Making your offer more attractive to sellers
• Possibly qualifying you for a lower interest rate
• Helping you avoid private mortgage insurance (PMI)

Still, it’s not the only way to become a homeowner.

You Have Other Options

There are many loan programs designed to make buying a home more accessible:

• Conventional loans: Some allow as little as 3% down
• FHA loans: Require only 3.5% down
• VA and USDA loans: May offer zero-down options if you qualify

How to Decide What’s Right for You

There’s no single answer that fits everyone. Consider your personal financial situation and long-term goals:

• How much money have you saved?
• How long do you plan to stay in the home?
• What is the housing market like in your area?

Tips for Planning Your Down Payment

• Don’t use all your savings—keep some for moving expenses and home repairs
• Save in a high-yield savings account if you’re still building your down payment
• Use a mortgage calculator to estimate monthly payments at different down payment levels

Is 20% Down Right for You?

Pros:

• You’ll have lower monthly payments
• You can avoid paying mortgage insurance
• Your offer may be more appealing to sellers

Cons:

• It takes longer to save
• You might delay buying a home
• You’ll use up more of your savings

Bottom Line

You don’t have to wait until you have 20% saved to buy a home. Many qualified buyers put down much less—and still get into homes they love.

Take the Next Step Toward Homeownership

Talk to a mortgage lender about your options. Find out what loan programs you may qualify for and decide what down payment works for your budget and goals. Buying a home is a big step, but you don’t have to do it alone.

Ready to explore your path to homeownership? Reach out today, and let’s find a down payment strategy that works for you.