"You need 20% down." It's the most repeated mortgage myth, and it keeps perfectly good buyers renting for years. Here's the truth: you can buy with far less — the real question is what each option costs you.
What 20% actually buys you
On a conventional loan, 20% down means no private mortgage insurance (PMI). At a $450,000 price, 20% is $90,000 down and a $360,000 loan. Skip PMI, and you save that insurance premium every month until you'd otherwise have 20% equity.
The 3–10% path exists
Conventional loans accept down payments as low as 3%; FHA loans go down to 3.5%. That gets you into a home sooner, but it means: a larger loan, a higher principal-and-interest payment, and monthly PMI that usually stops once your equity hits 20%.
| Down payment | Loan amount | Monthly P&I (6.5%) | PMI? |
|---|---|---|---|
| 3% ($13,500) | $436,500 | $2,759 | Yes |
| 10% ($45,000) | $405,000 | $2,560 | Yes |
| 20% ($90,000) | $360,000 | $2,275 | No |
The trade-off most guides ignore
Saving in a rising market while paying rent can cost more than the PMI you'd avoid. If house prices climb while you save for 20%, you run a treadmill. PMI is temporary; waiting can be permanent. For many, a smaller down payment now outweighs the insurance premium later.
Pick a number, see the cost
Sample a few down-payment percentages in the HomMetra calculator and watch the loan amount, monthly payment and total interest change. It takes seconds to see whether the wait for 20% is actually worth the monthly savings.