It might be less than you think. The more down payment you have, the smaller your mortgage will be. But it’s not realistic for everyone to be able to put down a huge chunk of money up front. Instead, consider different down payment percentages and scenarios when you’re looking to purchase property.

20%

This is a great number. It makes lenders confident that you’re fully prepared for home ownership and makes you an appealing buyer to sellers. With a 20% down payment, you’ll avoid paying mortgage insurance, and also set yourself up for a good interest rate. If 20% is unrealistic for you, don’t worry—keep reading.

5%-10%

You can still get a conventional loan with a smaller down payment—about 5% when your loan is $417,000 or less and 10% if it’s higher. This option will make your monthly mortgage payments a bit higher for three reasons. First, you’re taking out a larger loan. Second, your interest rate will be higher. Third, you’ll need to pay private mortgage insurance (PMI), also known as private mortgage insurance, is a lender’s protection in the event that you default on your primary mortgage and the home goes into foreclosure.

When borrowers apply for a home loan, lenders typically require a down payment equal to 20% of a property’s purchase price. Since you are putting down under 20%. You may need to pay PMI to offset the risk to the lenders who grant you a home loan. This might seem like a bummer, but if your other monthly debts are manageable, it might not be a deal breaker.

Also, when you get a conventional loan, PMI doesn’t stick around forever. When your mortgage balance drops to 78% of the home’s original value, PMI is automatically canceled, and there are a few ways to get rid of it even sooner. So while it might not be ideal, you don’t necessarily need to rule out a mortgage just because of PMI.

3.5%

If your credit score is above 580, you’ve been employed for the last two years, and you’re buying a property to be your primary residence, you may qualify for an FHA loan that only requires a 3.5% down payment. To get these 15 or 30 year fixed rate mortgages you’ll need to meet a few other criteria, but FHA loans can be a great option for people with lower incomes or less-than-perfect credit. Expect your monthly mortgage payments to be higher, as you’ll need to pay mortgage insurance, and be aware that you’ll need to pay PMI for the life of the loan.

0%

This is only an option for certain people. But are you an active or retired service member? Or do you live in a rural area? If so, you might qualify for a loan from the U.S. Department of Veteran Affairs or the U.S. Department of Agriculture’s Rural Development Program that does not require a down payment.
The co-buying percent

The co-owning percent

When you co-buy a home through services like PairGap, you split the costs of owning a property with a partner—or partners—which can dramatically increase your purchasing power while reducing your individual costs. If you have a 10% down payment and your partner has 10%, you’ve hit that magic 20%. If you’re buying as a team of three, your share of the down payment can be even lower. Before you dismiss home ownership as too expensive, make sure you’ve considered all your options—and all your potential partners.