FAQ: Do I need a large down payment to buy a home?

No – a large down payment isn’t required. The “20% rule” is a common myth. The average down payment is about 8%, and many buyers qualify for programs that require as little as 0-3% down, depending on eligibility.

Even though a large down payment isn’t always necessary, planning ahead can still make a big difference. Setting a savings goal, automating contributions, and trimming unnecessary expenses can help you feel more prepared and confident when it’s time to buy. Adding bonuses, tax refunds, or other windfalls to your savings can accelerate your path to homeownership.

It’s also worth considering the benefits of a larger down payment if you can manage it. A bigger down payment can lower your monthly mortgage payments, reduce interest costs over time, and potentially eliminate the need for private mortgage insurance (PMI). But even a smaller down payment doesn’t prevent you from buying a home – it just means you’ll need to plan carefully and work with a lender to find a loan program that fits your financial situation.