How Much Down Payment Do You Really Need in 2026?
The 20% down payment is one of the most persistent myths in home buying. According to the National Association of Realtors, the median first-time buyer put down just 8% in recent years. In 2026, most buyers put down 5–10%, pay mortgage insurance for a few years, and build equity through appreciation and principal paydown.
Minimum Down Payment by Loan Type
| Loan type | Minimum down | Mortgage insurance? |
|---|---|---|
| Conventional | 3% | PMI (cancelable at 20% equity) |
| FHA | 3.5% | MIP (often life of loan) |
| VA (eligible veterans) | 0% | None (funding fee applies) |
| USDA (rural) | 0% | Annual guarantee fee |
What 20% Down Actually Gets You
Twenty percent isn't a requirement — it's the threshold where PMI drops off. Putting 20% down means:
- No private mortgage insurance (saving $100–$400+/month).
- A smaller loan, so lower monthly payments and less lifetime interest.
- Sometimes a slightly better interest rate.
On a $425,000 home, choosing 20% down over 3% down can save roughly $96,000 in lifetime interest on a 30-year fixed at current rates.
The Real Question: Sooner or Bigger?
The smart trade-off isn't "can I afford 20%?" It's "what does each down payment level cost me in PMI, monthly payment, and total interest — and which fits my life?" Buying sooner with less down lets you start building equity now instead of paying rent while you save.
Don't Forget Cash-to-Close
Your down payment isn't the only upfront cost. Total cash-to-close (down payment + closing costs + reserves) is often 50–100% higher than the down payment alone. Budget for the full picture.
See How Down Payment Changes Your Payment
Try different down payment amounts in our Mortgage Calculator, or check how much house you can afford based on your savings and income.
Disclaimer: HomeWise Calc provides educational information only and is not a lender or financial advisor. Down payment requirements vary by lender. Consult a licensed professional before deciding.