FIRST-TIME BUYERS

You Probably Don’t Need 20% Down

Reviewed by Susan Pryor, Licensed Mortgage Loan Originator, NMLS #157369 — Updated August 2026

Last updated: August 2026

Key Takeaways

  • The 20% down rule is a myth; you can purchase with as little as 0% to 5% down
  • Putting less than 20% down adds Private Mortgage Insurance (PMI) to your conventional loan
  • PMI is temporary and drops off automatically once you build enough equity
  • For many buyers, paying PMI for a few years is cheaper than waiting to save 20% while home prices and rents rise

One of the most common reasons first-time buyers wait is because they think they need 20% down.

That number has been floating around for decades. And for a lot of buyers, it’s simply not accurate.

Depending on your situation — income, credit, and the type of loan you qualify for — you may be able to buy a home with significantly less than 20% down. Some programs require as little as 3% to 5%. Some require even less: VA loans allow eligible veterans to buy with nothing down, and Georgia down payment assistance programs can cover part or all of what you’d otherwise bring.

0%

VA Loans

0% Down (For eligible military)

3–5%

Conventional Loans

3% to 5% Down

3.5%

FHA Loans

3.5% Down

Up to 100%

Georgia DPA Grants

Assistance can cover up to 100% of upfront cash

So what does 20% down actually do?

It eliminates private mortgage insurance (PMI) — a monthly cost added to your payment when your down payment is below that threshold. Whether paying PMI makes sense for your situation depends on your numbers, and there’s usually more than one way to look at it. For many buyers, paying PMI for a few years costs less than waiting years longer to buy while saving toward 20%.

The point is: don’t assume you’re not ready just because you haven’t saved 20%. You might be closer than you think.

FAQ

Common Questions

It depends on the loan. Conventional loans can go as low as 3–5%, FHA requires 3.5%, and VA requires nothing down for eligible veterans. Georgia down payment assistance programs can cover part or all of what you’d owe.

Private mortgage insurance is a monthly cost added when you put down less than 20% on a conventional loan. You can avoid it with 20% down — but for many buyers, paying PMI now beats waiting years to save more. It also drops off once you reach enough equity.

Not always. While you save, prices and rents keep moving. The real question is what the numbers say for your situation — that’s a short conversation, not a long process.

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About Southern Mortgage Authority — Susan Pryor, Branch Manager | Licensed Mortgage Loan Originator, NMLS #157369, has served 6,000+ clients over 25 years. Based in Marietta, GA and licensed in 13 states. Call 678-712-2063 or send us a message.

Susan Pryor NMLS #157369 | Ark-La-Tex Financial Services, LLC NMLS #2143 d/b/a Benchmark Mortgage | Equal Housing Lender. Not a commitment to lend. All loans subject to credit approval.