Many people are all too eager to start their home search, but the idea of saving up 20% for a down payment seems like an insurmountable task. In fact, 33% of buyers aged 26 to 34 — and 12% of buyers overall — reported that saving for a down payment was the hardest part of the mortgage process in a 2025 National Association of Realtors (NAR) report.
However, just because this “20% rule” has been recommended for years, it doesn’t mean you have to follow it to secure your dream home. Find out how much you really need to save to make homeownership a reality — it might be a lot less than you think.
The national median down payment across all buyers is 15%, according to an NAR report.
Jump to insightPutting down 20% is not a rule — just a recommendation to avoid private mortgage insurance.
Jump to insightVA and USDA loans don’t require any down payment.
Jump to insightMaking a smaller down payment might lower your interest rate since mortgage insurance adds protection to the lender.
Jump to insightWhat is the typical home down payment?
While you may have heard that a 20% down payment is typical, the amount buyers are putting down on homes has actually decreased in recent years.
The median down payment on a home across all buyers is only 15%, according to the 2025 NAR Home Buyers and Sellers Generational Trends Report. For buyers ages 26 to 34, the median down payment was 10%; for buyers ages 35 to 44, it was 14%; and for buyers ages 45 to 59, it was 17%.
That’s a stark difference from buyers ages 60 to 99, who put down anywhere from 28% to 38% on their homes.
“The trend for several years has been for homebuyers to make smaller down payments,” Lerner said Jason Lerner, an area development manager at George Mason Mortgage, a lender based in Fairfax, Virginia. “Many of my clients with the ability to make a large down payment are still choosing to make a smaller down payment.”
Down payment basics explained
Having a 20% down payment isn’t a hard-and-fast rule for buying a home, so homeownership could be closer than you think. Here’s what you need to know about making your down payment.
What is the 20% rule?
Lener explained that the 20% down payment has traditionally been an important number to avoid private mortgage insurance (PMI).
Mortgage insurance has become much more affordable and, depending on the program and the homebuyer’s qualifications, monthly mortgage insurance now may be tens of dollars instead of hundreds of dollars in the past.
Additionally, Lerner says that this popular “20% down payment” figure should not keep people from buying a home. He says he has had clients who put off their home search to save this money, only to find themselves in a less desirable position to buy a home later on.
What is private mortgage insurance (PMI)?
Private mortgage insurance (PMI) is an additional monthly cost that borrowers will have to pay alongside their mortgage payment if they put less than 20% down on a conventional mortgage. The purpose of PMI is to protect the lender in case the borrower defaults on the loan.
While it can be an added expense, it can also help borrowers get into a home sooner if they are unable to save for a 20% down payment. Once your equity reaches 20%, you can request that your servicer cancel PMI.
Your lender must automatically cancel PMI once your principal balance reaches 78% of the value of the home (and your equity therefore reaches 22%), according to the Consumer Financial Protection Bureau.
What is the minimum down payment on a house?
A minimum down payment is required for most types of home loans, with the exception of a few government-backed mortgages. Here’s a look at minimum down payment requirements for some common types of mortgages.
| Loan type | Minimum down payment |
|---|---|
| Conventional loan | At least 3%; varies by lender |
| Jumbo loan | Usually at least 10%; varies by lender |
| FHA loan | At least 3.5% |
| VA loan | No down payment required |
| USDA loan | No down payment required |
Conventional loans
Conventional loans, which are loans not insured by the government, have down payment requirements that are specific to each lender. You’ll have to put at least 3% down, and if you put down less than 20%, you will usually have to pay for PMI. Jumbo loans require a higher down payment because of the larger loan amount and greater degree of risk for the lender.
FHA loans
A loan from the Federal Housing Authority (an FHA loan) requires a down payment of as little as 3.5% if you have a credit score of at least 580. If your credit score is from 500 to 579, you have to put down at least 10%.
VA and USDA loans
VA loans, which are available to veterans, current service members and surviving spouses, are available with no down payment. Similarly, USDA loans, designed for low- and moderate-income applicants and properties in rural areas, have no down payment requirement.
» MORE: What does clear to close mean?
How average down payment varies
Down payments look different for everyone. Where you live, what type of home you buy and how old you are all affect how much you'll pay upfront. Let’s break down what you can expect based on these factors.
By region and state
The median down payment across the United States is 15%, but what that percentage means in dollars changes depending on where you're buying a home. In expensive areas like California or New York, homes cost more, so even at 15%, you’ll need more cash upfront.
In states where homes are less expensive, that same 15% means a smaller dollar amount. Local housing markets, job opportunities and how many homes are for sale all play a role in down payment sizes.
By home type
The type of home you buy matters, too. About 75% of people buy single-family homes (standalone houses with their own yard).
Condos and townhouses might have different rules. Some lenders ask for bigger down payments on condos because they see them as slightly riskier. If you’re buying a unit in a large apartment building or a property with multiple units, you might need to put down more money or show you have extra savings.
By buyer type
First-time buyers make up about one in four homebuyers, and where they get their down payment money is very different from repeat buyers. About half of all buyers use their savings, but 45% use money from selling their previous home.
If you’re buying for the first time, you’ll probably use savings, gifts from family or help from assistance programs. If you’ve owned a home before, you can use the profit from selling it to make a bigger down payment on your next house.
By generation
Your age often determines how much you can put down. Younger Millennials (ages 26 to 34) typically put down 10%. But the Silent Generation (ages 79 to 99) puts down 38% — almost four times as much.
About 71% of Younger Millennials use their savings, compared to only 37% of Older Boomers. Older buyers usually have more money because they’ve been saving longer and often have money from selling a previous home. Younger buyers are still building savings while paying off student loans and other bills.
How much should you put down on a house?
The amount you should put down on a house depends on a variety of factors:
- Your savings
- Your monthly budget for housing expenses
- The type of loan
- Current market conditions
- Current interest rates
Putting down a higher down payment has its advantages: You are borrowing less money, you have lower monthly payments and you pay less interest over the life of the loan. You also reduce the amount of mortgage insurance you owe or avoid it altogether. Another benefit is that sellers may see your offer as more attractive.
Depending upon the program, making a down payment of less than 20% can actually improve the interest rate slightly.”
But there are also reasons you may not want to put down a large down payment: It might require you to wait longer until you can enter the housing market, or it could deplete your savings that you need for other purposes or emergencies. Putting down a smaller down payment might also improve your loan terms due to required PMI.
“Depending upon the program, making a down payment of less than 20% can actually improve the interest rate slightly,” said Lerner. “Rates are determined by risk, and because a buyer making less than a 20% down payment will have mortgage insurance, the loan is considered less risky because the mortgage insurance adds an additional layer of protection from a buyer defaulting on their mortgage.”
Example down payment amounts
To understand what different down payment percentages mean in real money, here are some examples:
| Home price | 3% down payment cost | 10% down payment cost | 20% down payment cost |
|---|---|---|---|
| $300,000 | $9,000 | $30,000 | $60,000 |
| $400,000 | $12,000 | $40,000 | $80,000 |
| $500,000 | $15,000 | $50,000 | $100,000 |
These numbers show why many buyers start with smaller down payments — saving $60,000 takes much longer than saving $9,000.
How to get down payment assistance
If saving for a down payment feels out of reach, you may qualify for help through down payment assistance programs. These are often offered by state housing agencies, local governments and nonprofits to make homeownership more affordable.
Here are some different types of assistance:
- Grants: Funds you don’t have to repay.
- Forgivable loans: Loans that are erased after you live in the home for a set number of years.
- Low-interest or deferred-payment loans: Loans you repay later, often when you sell or refinance your home.
Eligibility usually depends on your income, credit score and location. Many programs are designed for first-time homebuyers, though some accept repeat buyers who haven’t owned a home recently. You may also need to complete a homebuyer education course.
To find programs near you, check your state housing finance agency or visit HUD’s list of local resources and the National Council of State Housing Agencies. Lenders and real estate agents can also help you identify options that fit your budget and goals.
FAQ
Can I use gifted money as a down payment?
Yes, you can use gifted money as a down payment. Gift funds can be a great way to help first-time homebuyers who may not have enough savings for a down payment. However, it's important to note that the money needs to be a gift, not a loan, which means the borrower doesn't have to repay it. Lenders typically require documentation, such as a gift letter, to verify that the money is indeed a gift and not a loan.
Can I borrow money for a down payment?
While it's sometimes possible to borrow money for a down payment, it's generally not recommended. Borrowing money for a down payment can increase your debt-to-income ratio and make it harder to qualify for a mortgage. Additionally, lenders may view borrowing for a down payment as a risky financial move, and it can affect your ability to repay the loan. Instead, it's better to focus on saving for a down payment or exploring down payment assistance programs.
Is there a limit on how much money someone can gift for a down payment?
There is no limit to how much someone can provide as a gift for down payment funds for use on a primary residence. However, there may be tax implications for the person doing the gifting if the amount exceeds the annual exclusion.
Can I afford a 300K house on a $70K salary?
Whether you can afford a $300,000 home on a $70,000 salary depends on your debt, credit score, interest rate and down payment. A general rule is that your monthly housing costs, including the mortgage, taxes and insurance, shouldn’t exceed about 28% of your gross monthly income. With a solid credit score, little debt and a low interest rate, you may qualify.
Is $10,000 a good down payment on a house?
A $10,000 down payment may be enough for first-time buyers or homes with lower prices, especially if you qualify for FHA loans, which allow down payments as low as 3.5%. VA and USDA loans usually don’t require a down payment at all, though making one can help lower your monthly payment and total interest costs.
If $10,000 isn’t quite enough for your target price, you may qualify for down payment assistance programs through your state or local housing agency.
Can I negotiate the down payment amount?
You can’t usually negotiate the required minimum set by your lender or loan type, but you can negotiate other parts of the deal to reduce your upfront costs. For example, you can ask the seller to cover closing costs, or you might qualify for lender credits or buyer incentives. Comparing lenders is also a smart way to find lower down payment requirements or better loan terms.
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- National Association of Realtors, “2025 Home Buyers and Sellers Generational Trends Report.” Accessed Nov. 4, 2025.
- Consumer Financial Protection Bureau, “When can I remove private mortgage insurance (PMI) from my loan?” Accessed Nov. 4, 2025.
- IRS, “What’s New - Estate and Gift Tax.” Accessed Nov. 4, 2025.
