Down Payment Myths: How Much You Really Need to Buy a Home?

The 20% down payment myth keeps a lot of would-be buyers on the sidelines longer than necessary. The truth is more flexible: most first-time buyers put down far less. According to the National Association of Realtors, the median down payment for first-time buyers has hovered around 8% in recent years.

Here’s how minimums break down by loan type:

• Conventional loans: as little as 3% down
• FHA loans: 3.5% down with a 580+ credit score
• VA loans: $0 down for eligible veterans and active military
• USDA loans: $0 down in qualifying rural and suburban areas

A smaller down payment gets you into a home sooner, but it comes with trade-offs. You’ll likely pay private mortgage insurance (PMI) until you reach 20% equity, and your monthly payment will be higher because the loan is larger. A bigger down payment cuts the loan size, lowers the monthly payment, and may unlock better rates.

The right number isn’t the biggest you can scrape together — it’s the amount that lets you buy confidently while keeping an emergency fund and moving-in reserves intact.