Down payments & PMI
Typically, homebuyers put down 5% to 20% of their home’s purchase price, but a down payment can be as low as 3%. Homebuyers putting down less than 20% are required to pay private mortgage insurance (PMI) monthly until they build up 20% equity in their home.
Did you know?
The National Association of REALTORS® reported that in 2025, the median down payment was 19% for all buyers and 10% for first-time buyers.
The reality of down payments
Nearly a third of prospective homebuyers think they need a down payment of 20% or more to buy a home, according to a Freddie Mac survey. This myth remains one of the largest perceived barriers to achieving homeownership.
What most people don't realize is that you have choices when it comes to your down payment, even the possibility of putting down as little as 3% through Freddie Mac's Home Possible® or HomeOne® mortgages.
Where PMI comes in
If you make a down payment of less than 20%, you'll have to pay PMI each month until you build up 20% equity in your home. Take the time to understand PMI because the cost can be relatively small in comparison to the value of being able to secure a 30-year fixed-rate mortgage sooner rather than later.
Funding your down payment
Although most homebuyers use personal savings to finance down payments, there are many other options of funding sources, including gifts or loans from relatives. In addition, many state, county and city governments offer down payment assistance programs to people in their communities who are well qualified and ready for homeownership.
70%
Savings, inheritance, retirement accounts, other assets
31%
Proceeds from sale of previous property
23%
Gift or loan from family or friend
4%
Second lien, home equity loan or equity line of credit
10%
Assistance or loan from nonprofit or government agency
Looking for down payment assistance?
Carefully evaluate your finances to determine how much you can afford and talk with your lender or housing professional about the down payment option that makes the most sense for you.
As you save for your down payment, remember there are other costs related to the purchase of a home, aside from the down payment.
Tools and Resources
Calculator: Down Payments
Research how much of a down payment you should consider
Step-by-Step Mortgage Guide
Understand the mortgage process, from application to closing
CreditSmart® Essentials
Learn how to save and manage money to support home ownership.