How Much of a Down Payment Do You Really Need in 2025?

Jamie Blakely
Jul 30
2 min read

For many buyers, the biggest hurdle to homeownership is saving for the down payment. A common misconception is that you need 20% of the home’s price — but in 2025, that’s no longer the standard. In fact, many programs allow you to buy a home with far less. Let’s break down what you really need to know.

The 20% Myth

While putting 20% down does help you avoid private mortgage insurance (PMI) and lowers your monthly payment, it’s not a requirement for most buyers. Today, the average down payment for first-time homebuyers is closer to 6%–7%.

Minimum Down Payment Options in 2025

Conventional Loans: As low as 3% down for qualified buyers.
FHA Loans: Minimum 3.5% down, with more flexible credit requirements.
VA Loans (for Veterans): 0% down, plus no PMI.
USDA Loans (for Rural Areas): 0% down, with income and location requirements.

Factors That Impact How Much You Should Put Down

Monthly Budget: A larger down payment means a lower monthly mortgage.
Avoiding PMI: If you put less than 20% down, you’ll typically pay PMI until you build enough equity.
Market Conditions: In a competitive market, sellers may prefer offers with higher down payments, as they’re seen as less risky.
Long-Term Goals: If you plan to stay in the home for many years, putting more down may save money over time. If it’s a starter home, you might want to keep more cash on hand.

The Benefits of a Larger Down Payment

Lower interest rates and monthly payments
Smaller loan balance, meaning you pay less interest over time
No PMI (if 20% or more)
Stronger offers in competitive markets

The Benefits of a Smaller Down Payment

Get into a home sooner, instead of waiting years to save
Keep more cash available for emergencies, repairs, or upgrades
Take advantage of first-time buyer programs and grants

Final Thoughts

In 2025, you don’t need 20% down to buy a home — far from it. With programs as low as 0%–3.5% down, many buyers are finding that homeownership is more attainable than they thought. The right amount for you depends on your budget, goals, and comfort level.

If you’d like to explore how much you’d need for the home you want, I’d be happy to connect you with trusted lenders and help you create a buying plan that works.