Think You Need 20% Down to Buy a House? You Probably Don't.
If you've been waiting to buy a home in Denver because you think you need a 20% down payment, there's a good chance you're waiting for the wrong number.
Some buyers may be able to purchase with as little as 3% down on a conventional loan. Others may find that 5% down makes more sense.
And depending on the loan program, there are other low-down-payment options too.
So why do we hear about 20% so often?
Because somewhere along the way, 20% down became confused with the minimum required to buy.
It isn't.
Quick Answer: How Much Do You Need to Put Down?
For a conventional mortgage, qualified buyers may have options starting at:
3% down with certain conventional programs
5% down with broader conventional financing options
10% or 15% down for buyers who want to reduce the loan amount while keeping more cash available
20% down to generally eliminate private mortgage insurance (PMI)
FHA and VA financing have different down payment requirements, and eligible Colorado buyers may also have access to down payment assistance.
The better question isn't:
"What's the minimum down payment?"
It's:
"How much should I put down for my situation?"
Those aren't always the same answer.
What Does 3% vs. 5% Down Look Like in Denver?
Let's use a $500,000 Denver home as a simple example.
3% down = $15,000
5% down = $25,000
That's a $10,000 difference in upfront cash.
Putting the additional $10,000 down reduces your loan balance, but that doesn't automatically mean it's the better financial decision.
What else could that $10,000 do for you?
Maybe it stays in your emergency fund.
Maybe you need it for closing costs.
Maybe the house needs furniture, appliances, or repairs.
Or maybe putting it toward the house creates a meaningful improvement in your monthly payment or mortgage insurance.
That's what should drive the decision.
But What About PMI?
This is where the 20% myth usually comes from.
If you put less than 20% down on a conventional mortgage, you'll generally have private mortgage insurance, commonly called PMI.
And yes, PMI increases your monthly payment.
But PMI isn't automatically a reason to wait until you have 20% down.
Consider a buyer purchasing that same $500,000 home.
A 20% down payment would be $100,000.
A 5% down payment would be $25,000.
That's a $75,000 difference in cash.
Waiting years to accumulate another $75,000 solely to avoid PMI may—or may not—make financial sense.
The answer depends on the buyer, the market, the cost of PMI, their other financial goals, and what happens to home prices while they're waiting.
Your Down Payment Isn't Your Only Upfront Expense
This is one of the biggest mistakes first-time buyers make.
They save for the down payment and assume they're done.
You're not.
A home purchase can also involve:
Closing costs
Prepaid property taxes
Homeowners insurance
Initial escrow funding
Inspections
Appraisal costs
Moving expenses
Immediate repairs or purchases after closing
That's why I generally don't like seeing buyers put every available dollar into their down payment just because they can.
Owning the house with no money left in the bank isn't the goal.
More Down Isn't Automatically Better
Suppose you have $60,000 available for a home purchase.
Should all $60,000 go toward your down payment?
Not necessarily.
Maybe increasing the down payment meaningfully improves the loan.
Great.
But maybe the difference in monthly payment is relatively small, and keeping $15,000 or $20,000 in reserves gives you significantly more financial security after closing.
That's a decision worth analyzing rather than assuming.
Your mortgage should work alongside the rest of your finances—not consume them.
So How Much Should You Put Down?
Before choosing 3%, 5%, 10%, 20%, or something else, compare:
Your monthly payment.
How much does each option actually change it?
Your PMI.
How does the down payment affect mortgage insurance?
Your cash after closing.
How much money will you still have available once you own the home?
Your other goals.
Do you need reserves, have upcoming expenses, or have higher-interest debt competing for that cash?
Your timeline.
How long do you expect to own the property?
Sometimes putting more down is clearly better.
Sometimes keeping the cash is clearly better.
And sometimes the difference is small enough that liquidity wins.
The Bottom Line
You do not automatically need 20% down to buy a house in Denver.
Qualified buyers may have conventional options with substantially less.
But don't stop at asking:
"What's the least I can put down?"
And don't assume:
"I should put down as much as possible."
Ask the better question:
"Which down payment gives me the best combination of monthly payment, upfront cash, and money left after closing?"
That's how you turn a down payment into a mortgage strategy instead of just a percentage.
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About Jennifer Chicano | Your Loan Chic
Jennifer Chicano is a Certified Mortgage Advisor™ and Mortgage Broker serving homebuyers throughout the Denver metro area. She helps buyers compare mortgage strategies and understand how their down payment, monthly payment, and available cash work together when purchasing a home.
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