August 2026
If you’re planning to buy your next home soon, you’ve probably heard the old rule about saving 20% for your down payment. The truth is, you usually don’t have to — plenty of loan options let qualified buyers put down much less. But a lot of repeat buyers I work with choose to put down 20% anyway, and it’s worth understanding why.
According to the National Association of Realtors (NAR), the typical repeat buyer puts down 23% when they buy a home — more than double the 10% they may have put down as a first-time buyer. How do they manage it? Their equity. When you’ve owned a house for a while, you pay down your mortgage and your home’s value climbs, so the gap between what you owe and what your house is worth — your equity — grows. When you sell, that equity turns into cash, and most repeat buyers put it straight toward their next down payment.
First-time buyers don’t have that springboard yet, and that’s completely normal. But if you already own a home, you may be holding more buying power than you realize.
A smaller monthly payment. The more you put down, the less you borrow at today’s rates.
Paying less interest. A smaller loan carries less interest across the life of your mortgage. Put 20% down and you’ll only pay interest on the remaining 80%.
No private mortgage insurance (PMI). Put down less than 20% on a conventional loan and lenders usually add a monthly PMI fee. With 20% down, that goes away.
A stronger offer. A larger down payment can make your offer more attractive, since sellers tend to read it as a sign your financing is solid and the deal is more likely to close.
You don’t need to put 20% down to buy your next home, but you may want to. If your equity puts it within reach, going bigger can lower your costs and make moving more doable than you think — even with today’s rates. I can help you figure out what your current house could add to your next down payment, and connect you with a trusted lender to run the numbers.
Market data and analysis courtesy of Keeping Current Matters.