Do you need 20% down to buy a home?

A 20% down payment means you borrow 80% of the home’s purchase price before accounting for any financed costs. Putting more down may reduce the loan amount and can affect pricing or mortgage insurance. But many buyers use other down payment amounts, depending on the loan program and lender.

What 20% can change

On many conventional loans, a down payment below 20% may mean private mortgage insurance (PMI). Mortgage insurance protects the lender, not the borrower. Requirements and cancellation rules depend on the loan; ask for the monthly cost and how long it may apply. Government-backed loans have their own insurance or fee structures, so “20% down means no mortgage insurance” is not a safe rule across every loan type.

A larger down payment also means a smaller amount borrowed. Ask lenders to show the same home price and loan terms at several down payment levels, including the resulting rate, monthly payment, mortgage insurance, and cash needed at closing.

Keep money for the rest of the move

Do not compare down payments in isolation. Set aside funds for closing costs, moving, repairs, and an emergency reserve. A buyer who can reach 20% only by using nearly all available savings may prefer to compare a smaller down payment and the resulting monthly cost.

Make your own comfortable monthly budget before treating a preapproval amount as a target. Include taxes, insurance, utilities, maintenance, and any association dues, whether or not they appear in the mortgage payment.

Read the CFPB’s guides to choosing a down payment and how down payment affects mortgage terms. Ask each lender for written estimates using the same purchase price and compare the complete terms.