Purchase · 5 min read
Do I really have to put 20% down to buy a house?
September 29, 2026 · Written by Bill Egan, NMLS 7342
Short answer
No. Twenty percent down is a choice, not a rule. Many buyers use about 3 percent on a conventional loan, 3.5 percent on an FHA loan, or nothing down on a VA loan if they qualify. A smaller down payment usually adds mortgage insurance, and you still need cash for closing costs. The number that matters is the full payment you can live with, with money left after you close.
01
Why this comes up
You keep hearing that you need 20 percent down or you cannot buy. A news story, a parent, or a friend said that is the rule. You have enough for a smaller down payment, and you are afraid the rest of the process is closed to you.
02
Where this goes wrong
You wait years to save 20 percent while prices and rent move. Or you put almost everything into the down payment and then come up short for closing costs, property taxes, and insurance. Those are separate from the down payment. Or you shop houses on a payment that left out mortgage insurance, and the real payment does not fit the house you are under contract on. Some buyers also tell the seller they are putting 20 percent down because they think that is what a serious offer looks like, and they do not have it.
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What we do about it
We start with the cash you actually have, not with 20 percent. If you qualify, we will show a conventional loan with a small down payment, an FHA loan at 3.5 percent down, and a VA loan with no down payment if you are eligible. Conventional means a regular loan that is not FHA or VA. Mortgage insurance is the extra monthly charge many loans have when you put down less than 20 percent. We will put that charge in the payment, and we will keep the down payment separate from the cash you need to close. Twenty percent can avoid that insurance on a conventional loan. It is not the price of getting in.
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How to get ready
Add up the cash you can use without emptying the account you need to live on. Ask us for the payment at 3 percent, 5 percent, and 10 percent down, not only at 20. Ask what the mortgage insurance is on each one, and when it can come off. Remember closing costs are extra. A gift from family can be part of the down payment if we document it before you write the offer.