How Much Should You Really Save for a Down Payment?

Buying your first home is exciting, but figuring out how much to save for a down payment can feel like one big question mark. Do you really need 20% down? Is 10% enough? What about first-time buyer programs?

Let’s cut through the noise. This guide walks you through the real numbers, what they mean for your mortgage, and how to decide what’s right for you. No judgment, just clarity.

What is a Down Payment and Why It Matters

A down payment is the amount of money you pay upfront when purchasing a home. It’s your initial ownership stake, and it determines the size of your mortgage and potentially how much interest you’ll pay over time.

• Lower down payments mean borrowing more, potentially higher monthly payments, and private mortgage insurance (PMI).
• Higher down payments reduce your loan amount and may lead to better rates and no PMI.

Your down payment can also affect your buying power, especially in competitive markets.

How Much Do Most People Put Down on a House?

You might think everyone saves 20% of their home price, but that’s a myth. According to the National Association of Realtors, the average down payment for first-time buyers is closer to 6-7%.

For example:

• On a $300,000 home, 6% down = $18,000
• On a $450,000 home, 10% down = $45,000

Many government-backed loans allow even less:

• FHA: as low as 3.5%
• VA/USDA: 0% down (for those who qualify)

How Down Payments Affect Your Mortgage Terms

Your down payment directly impacts:

• Monthly payment size: The more you put down, the smaller your loan.
• Interest rate: Lenders often offer better rates to borrowers with more skin in the game.
• PMI requirements: If your down payment is less than 20%, you’ll likely pay monthly PMI.

Let’s say two buyers purchase a $350,000 home:

• Buyer A puts down 5% ($17,500): higher loan, higher monthly payments, PMI required.
• Buyer B puts down 20% ($70,000): smaller loan, lower payments, no PMI.

That difference could mean hundreds of dollars per month.

How Much Should You Personally Save?

There’s no one-size-fits-all answer. Instead, ask:

• What’s the average home price in your area?
• How soon do you want to buy?
• What’s a monthly payment you’re comfortable with?

Then calculate backward. 

Also factor in:

• Closing costs (2-5% of home price)
• Moving and setup expenses
• Emergency fund (recommended 3-6 months of expenses)

Do You Need to Put 20% Down to Buy a House?

Nope. It’s a common belief, but it’s not required.

• 20% down avoids PMI and offers the best terms.
• But many first-time buyers get approved with less.

Programs like FHA, VA, and Foyer’s matched FHSA exist specifically to help buyers get in the door with lower down payments.

Is 10% Enough for a Down Payment?

For many, yes. 10% is a solid amount:

• You’ll borrow less than with 5%
• PMI costs will be lower
• You’ll appear more favorable to lenders

It may not eliminate PMI, but it strikes a good balance between affordability and benefit.

How to Start Saving for a Down Payment Today

Start where you are. Here’s how to make your savings work harder:

• Open a Foyer FHSA: Earn up to 4.15% APY and get a 6% match on your savings
• Automate contributions: Set a fixed amount each payday
• Track your progress: Use Foyer’s milestone tracking to stay motivated
• Talk to a Homeownership Advisor: Get personalized advice, judgment-free

Foyer makes it easy to visualize your savings, understand what’s next, and earn rewards along the way.

Start Saving with Foyer

Resources & Next Steps

Ready to dive deeper?

• How to Save for a Home in 2025: A Comprehensive Guide
• Am I Ready to Buy My First Home? A Complete Guide
• How Much Home Can You Afford on a $150K Salary?

When you’re ready, Foyer is here to help you every step of the way, no pressure, just progress.

Want help creating a savings plan that’s right for you? Chat with a Foyer Homeownership Advisor today.