If you've been waiting to buy a home because you think you need a 20% down payment...
You're not alone.
It's one of the biggest misconceptions I hear from prospective homebuyers, and unfortunately, it's causing many people to delay homeownership unnecessarily.
The truth is:
Many buyers qualify with much less than 20% down.
So where did the 20% myth come from?
Why Everyone Thinks You Need 20% Down
Years ago, putting 20% down became the "gold standard" because it typically allowed buyers to avoid Private Mortgage Insurance (PMI).
Over time, many people interpreted that to mean 20% was required.
It isn't.
Today, there are many loan programs designed to help qualified buyers purchase a home with significantly less.
What Are Your Options?
While every borrower's situation is different, here are some common examples:
Down payment assistance loans are available!
No Money down - VA financing.
3% down – Available for many first-time homebuyers using certain conventional loan programs.
3.5% down – FHA financing.
5% down – A popular option for many conventional loans.
10% to 20% down – May reduce your monthly payment and borrowing costs.
20% or more down – Typically eliminates PMI on conventional loans and reduces your loan amount.
The right answer depends on your financial goals—not a one-size-fits-all rule.
Should You Put Down More If You Can?
Sometimes.
A larger down payment can:
Lower your monthly payment.
Reduce the amount of interest paid over time.
Potentially eliminate PMI.
Increase your equity from day one.
But there are also situations where keeping additional cash in savings—or available for investments, renovations, or emergencies—may be the better financial decision.
That's why I encourage clients to look at the entire financial picture rather than focusing on one number.
My Advice
Don't let the idea of needing 20% down stop you from exploring your options.
You may qualify sooner than you think.
Even if you're not quite ready today, having a conversation now can help you build a plan so you'll know exactly what it will take to buy when the time is right.
Knowledge creates confidence.
Final Thoughts
Every buyer's situation is unique.
The best down payment isn't necessarily the largest one.
It's the one that supports your financial goals while leaving you in a strong position after closing.
I'm curious...
Before reading this article, did you think you needed a 20% down payment to buy a home? Let me know in the comments.
About the Author
Dave Cook is the founder of Denver Mortgage Lounge, a Division of Luminate Bank. Based in Denver, Colorado, Dave helps individuals and families across the country make confident home financing decisions through education, personalized mortgage strategies, and exceptional service.
Have a mortgage question? Whether you're buying your first home, refinancing, investing, or simply looking for a second opinion, I'd be happy to help.
Dave Cook
Branch Manager | Loan Officer
Denver Mortgage Lounge, a Division of Luminate Bank
201 Columbine Street, Suite 300
Denver, CO 80206
Phone: (303) 226-8735
Email: dave@denvermortgagelounge.com
Website: www.denvermortgagelounge.com
NMLS #274175
Luminate Bank NMLS #1281698
Equal Housing Lender
This article is provided for educational purposes only and should not be construed as legal, tax, financial, or mortgage advice. Mortgage programs, interest rates, underwriting guidelines, and lending requirements are subject to change without notice. All loans are subject to credit approval and program eligibility.
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