You may need less down than you think.

Many people put off buying a home because they believe they need 20% of the price saved first. That number does matter, but it isn’t a requirement.

The more useful question is what you gain and give up at different amounts, and which choice leaves you on steady ground after you move in.

Why 20% gets so much attention

Twenty percent is the point where mortgage insurance usually stops being required. If your down payment is less than 20% of the purchase price, you’ll typically pay for mortgage insurance.

Mortgage insurance protects the lender, not you, if you fall behind on payments. It lowers the lender’s risk, which can help you qualify for a loan you might not otherwise get. But it also adds to the cost of your loan. You may pay for it each month, at closing or both.

So 20% isn’t a gate you must pass through. It’s a trade-off point.

Low down payment options at a glance

Several kinds of loans work for buyers with smaller down payments. Rules and costs change over time, so treat this as a map, not a menu.

• Conventional loans. If you put down less than 20%, your lender will usually arrange private mortgage insurance (PMI) through a private company. PMI rates depend on your down payment and credit score. For borrowers with good credit, PMI is generally cheaper than FHA mortgage insurance.
• FHA loans. These loans are insured by the Federal Housing Administration. Every FHA loan requires mortgage insurance, with an upfront premium that you can pay at closing or add to your loan amount, and a monthly premium in your payment. Its cost is the same regardless of your credit score.
• VA loans. These are for eligible veterans, servicemembers and surviving spouses. Private lenders make the loans, and the Department of Veterans Affairs guarantees them. They’re available with low or even no down payment and don’t require monthly mortgage insurance, though you usually pay an upfront funding fee.
• USDA loans. The U.S. Department of Agriculture offers loans designed for low- and moderate-income borrowers in rural areas. They offer zero down payment. You’ll pay an upfront fee and ongoing mortgage insurance premiums.

For people who qualify, special programs like VA and USDA loans can cost less than a conventional or FHA loan.

How private mortgage insurance can end

PMI on a conventional loan doesn’t have to last for the life of the loan. Federal law gives you rights to end it on most mortgages for single-family primary residences that closed on or after July 29, 1999.

• You can ask to cancel it on the date your principal balance is scheduled to fall to 80% of the home’s original value. You can ask sooner if extra payments get you there early. You’ll generally need to ask in writing and have a good payment history, no second mortgage or other junior liens, and possibly proof, such as an appraisal, that the home’s value hasn’t dropped.
• It generally ends automatically on the date your balance is scheduled to reach 78% of the original value, as long as you’re current on your payments.

“Original value” usually means the lower of the purchase price or the appraised value when you bought the home. The PMI disclosure form you get with your mortgage should show the first date you can ask to cancel.

FHA loans follow different rules, and VA loans don’t have monthly mortgage insurance. If you have an FHA loan, ask your servicer, the company that collects your payments, how long your premiums last.

Look for down payment help

Many states, local governments and nonprofits offer programs to make buying a home more affordable. Many focus on low- and moderate-income families buying their first home. Others are for teachers, firefighters and other public service workers, or for buyers in certain neighborhoods. Many offer down payment assistance that can be used with a regular FHA or conventional loan.

A good place to start is your state’s housing finance agency, or HFA. HFAs are state-chartered agencies focused on affordable housing and homeownership, especially for first-time buyers with low to moderate incomes. They usually don’t make loans themselves. Instead, they work with participating lenders to offer affordable loans and down payment assistance. Some also help with closing costs. Programs vary by state, so contact your HFA directly.

When you find a program, ask how the help works and whether you’d ever need to pay it back.

Weigh more against less

There’s no single right amount to put down. A few questions can help you decide:

• How much cushion will you have left? Emptying your savings for a bigger down payment can leave you exposed when the first surprise repair arrives.
• What does mortgage insurance add? Compare your monthly payment and total cost at different down payment amounts.
• What’s the total cost over time? Borrowing less means paying less interest. A smaller down payment can mean a larger loan and higher costs over the life of the loan.

Ask lenders to show you official offers, called Loan Estimates, at different down payment amounts so you can compare them side by side. The right choice depends on your situation, and a housing counselor at a HUD-approved agency can help you think it through.

Your next step

Write down how much you’ve saved. Subtract an emergency cushion you don’t plan to touch, and note what’s left. Then look up your state housing finance agency and see whether any of its programs might fit you.