Purchase · 4 min read
Is 20 percent down worth it, or should I buy with less?
July 27, 2026 · Written by Bill Egan, NMLS 7342
Short answer
Twenty percent down avoids conventional PMI and can make the offer look stronger. It is not required. Conventional 3 percent, FHA 3.5 percent, and VA zero down are real programs. The better choice is the one whose full payment — loan, taxes, insurance, PMI or FHA insurance, and HOA — you can carry, with cash still in the bank after closing.
01
Why this comes up
You are stuck between saving for 20 percent and missing the house, or putting 3 to 10 percent down and paying insurance. It feels like either throwing money away or waiting forever.
02
Where this goes wrong
You wait for 20 percent, then write an offer with almost no reserves. Underwriting wants cash after closing you no longer have. Or you put 3 percent down, omit PMI from the payment you used to shop, and the house you are under contract on does not qualify.
03
What we do about it
We price the full payment — loan, taxes, insurance, PMI or FHA insurance, and HOA — with cash still in the bank after closing. Twenty percent avoids conventional PMI. It is not required. We will not wait years for 20 percent while rent rises if 5 or 10 percent still leaves you reserves.
04
How to get ready
Keep a cushion after closing. If PMI plus HOA breaks the budget, change the price or wait. If you can own this year with 5 or 10 percent down and still sleep, do not treat 20 percent as a moral test. Ask when conventional PMI can come off. Price FHA with the insurance included.