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Is a 20% Down Payment Really Necessary To Purchase a Home?

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There is a misconception that as a home buyer, you have to pay 20% of the total sales price in your down payment. In fact, a recent Lending Tree survey asks what discourages consumers from buying a home. For more than half of those surveyed, creditworthiness is the biggest obstacle. 

 This may be because these people assume that a 20% deposit is required. While it may benefit buyers to invest more money if you can, reducing the 20% is not required. As Freddie Mac puts it: 

 “The most damaging myth of the down payment, because it stops the home buying process before it can begin, is the belief that 20% is necessary.” 

 If saving sounds so overwhelming, you may be ready to give up your dream of homeownership before you even start – you don’t have to. According to the National Association of Realtors (NAR) Home Buyers and Sellers Profile, the average down payment hasn’t exceeded 20% since 2005. It may seem surprising, but today’s average deposit is only 12%. For first-time homebuyers whose average down payment is only 7%, this number is even lower.

What does that mean to you? 

 If you are a potential home buyer, the important thing to know is that you do not have to pay the full 20%. And while saving for any down payment amount can be challenging, remember that qualified buyers have programs that allow them to buy a home with as little as 3.5% down. There are also options like VA loans and USDA loans with no down payment requirements for qualified applicants. 

 To understand your options, you must do your homework. For more information on deposit assistance programs, visit websites such as Be sure to work with a real estate advisor early on to see what you may qualify for when buying a home. 


 Don’t let the 20% down payment myth end your home buying process before it begins. If you are looking to buy a home this year, reach out to a trusted real estate professional to start the conversation and explore your options.

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