If you’re dreaming of buying a home but think you need to save up for a 20% down payment, you’re not alone. Many buyers believe that putting down 20% is a must, but that’s not the case for everyone. In fact, according to the Zillow Buyer’s Housing Trends Report 2024, about half (48%) of mortgage buyers put down less than 20% when purchasing a home.
Let’s take a look at how down payments have changed over the years, and why you don’t need to let a big number like 20% keep you from buying your dream home.
A Shift in Down Payment Trends
Traditionally, the 20% down payment has been considered the standard, but in today’s housing market, it’s much more flexible. Here’s a breakdown of the percentage of homebuyers putting down different amounts, as reported by Zillow:
7% of buyers put down less than 3%.
11% of buyers put down between 3% and 5%.
8% put down 6% to 9%.
22% put down between 10% and 19%.
This shows that nearly half of buyers are putting down less than 20%, and many are opting for more affordable down payment options to secure their homes sooner rather than later. While 28% of buyers did put down exactly 20%, this isn’t the only route to homeownership.
The Flexibility of Less Than 20%
A 20% down payment is great if you can afford it—it often leads to better mortgage rates and no need for private mortgage insurance (PMI). But for many buyers, putting down less can be a smarter option, especially if it means entering the market faster. In fact, 48% of mortgage buyers in 2024 put down less than 20%, according to Zillow's report.
So, what does this mean for you? If you don’t have 20% saved up, you can still qualify for a mortgage and purchase a home with as little as 3% down, depending on the type of loan you choose.
Why Less Than 20% Could Be Right for You
There are several reasons why putting down less than 20% might work better for your financial situation:
Faster Homeownership: If you’ve been saving for a while but aren’t close to 20%, waiting might delay your homeownership goals. Putting down less could allow you to enter the market now, building equity and avoiding rising home prices.
More Financial Flexibility: Saving for a large down payment can drain your savings. By putting down less, you can keep more of your money in reserves for emergencies, renovations, or future investments.
Opportunities for First-Time Buyers: Many loan programs, like FHA loans, allow buyers to put down as little as 3.5%. This makes homeownership more accessible to first-time buyers who might not have the ability to put down 20%.
PMI Isn’t Forever: If you put down less than 20%, you may be required to pay PMI, but it’s not permanent. Once you build up enough equity, you can request to cancel PMI, freeing up more money in your monthly budget.
You Can Still Close Fast
Here at 14 Days to Close, we believe in helping buyers achieve their homeownership dreams—without unnecessary delays. Even if you’re putting down less than 20%, we can help you close on your home quickly. In fact, our goal is to get you to the closing table in just 14 days. This means you can secure your home fast, even if your down payment is smaller than expected.
Ready to Get Started?
Don’t let the myth of the 20% down payment keep you from moving forward with your home search. Whether you’re putting down 3%, 5%, or 20%, our team at 14 Days to Close is here to help you secure your dream home, fast and efficiently.
If you’re ready to start your homebuying journey, connect with one of our loan advisors today. Let’s discuss your options and get you on the path to closing on your new home.