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There are many strategies to save for a down payment, including maximizing your savings, reducing everyday expenses and applying for down payment assistance.
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You likely don’t have to save 20% for a down payment on a home. Conventional mortgages require just 3% down, and FHA loans require only 3.5% down, depending on credit score.
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You’ll also need to consider the costs of home insurance, maintenance and property taxes before buying a house.
More than half (52%) of aspiring homeowners cite the down payment and closing costs as a “very significant” obstacle to homeownership, according to Bankrate’s 2025 Home Affordability Report. Knowing how to minimize these costs upfront can save you from stressors down the road.
Here are our top ways to save for a down payment, advice on how much to put down and a rundown of other costs to consider.
The good news is that most mortgage down payment requirements are far lower than the oft-heard 20%. Here’s how the different loan types compare:
Of course, your minimum down payment is just one piece of the puzzle. The cost of the home you buy will also be a major factor in your down payment.
While the median home price in the U.S. was $414,900 in the last quarter of 2025, according to the National Association of Realtors (NAR), the home price you can expect to find varies by region and even metro area. In the Northeast, for example, the median home price was $514,600, while the Midwest saw a median price of only $317,100 in the fourth quarter.
Once you’ve decided how much home you can afford, you can start deciding how much to put down on your house and making a savings plan for your down payment.
What’s the typical down payment on a home?
The median down payment for all homebuyers is 19%, according to the National Association of Realtors. First-time homebuyers make a median down payment of 10%.
Learn more: How much should you put down on your house?
There are several ways to save for a house:
Although mortgage rates may be rising, that can be good news for your savings. Some banks and credit unions are paying as much as 4% annual percentage yield (APY) on select accounts. Consider stashing your savings in one of the following:
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High-yield savings account: High-yield savings accounts offer significantly higher earning potential than standard savings accounts. Some currently pay between 4% and 5%, as opposed to 0.01% at some big-name banks.
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Money market account: Money market accounts are a cross between a checking and savings account that may offer higher rates than standard savings accounts.
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Certificate of deposit (CD): CDs are fixed-rate savings vehicles with a finite term — often six, 12 or 18 months. Consider your homebuying timeline when using CDs, since there are penalties for withdrawing money early. If your homebuying plans give you the time, consider a CD ladder to allow you take advantage of changing interest rates over time.
Another strategy is to establish automated savings deposits to ensure you will make savings a regular part of your financial plan. If you’re working, your employer may be able to channel part of your direct deposits into a savings account for your down payment. Freelancers, contractors and business owners can schedule regular automatic transfers to their savings.
If you have the spare time and energy, another income source or a side hustle can help you save for a down payment. You might even be able to turn a hobby into a money-making proposition.
Down payment assistance could be an option if you’re struggling to save, especially if you’re a first-time buyer. This assistance can come in various forms, from deferred or forgivable loans to grants. Each program has different eligibility requirements, usually based on income and location. Start your search with your area’s local or state housing authority.
If you’re saving for a house, cutting back on your spending can help. Here’s how:
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Lower discretionary spending. These are expenses like subscription services, entertainment, delivery services or eating out. While you may not want to cut out this spending entirely, consider ways to spend less.
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Save money on your bills. If possible, negotiate recurring monthly or annual expenses, such as shopping around for a better rate on car insurance or reducing an internet bill.
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Pay down existing debt. A lower debt load will make you a better candidate for a mortgage, and once you’ve eliminated these payments, you can redirect money to your down payment fund.
While not an option for everyone, if you’re able to, moving back into your parents’ house or moving in with a roommate can help you save for a down payment as well. A strong majority (64%) of Americans would be willing to make a change to find more affordable housing, according to our 2025 Home Affordability Report.
While each company’s financial situation and performance measures vary, you might be able to get paid more, especially if you’ve made valuable contributions at work recently. Come to the discussion prepared, outlining the work you’ve done and how it impacted the company’s bottom line.
Many first-time homebuyers have turned to family members for help with a down payment. If a family member or friend is willing to give you some funds for your home, be sure to document this in a gift letter for your lender.
Your down payment is likely not the only reason you’re stashing money away. While working toward your down payment goal, you may want to temporarily adjust where your savings dollars go. You may be saving for retirement in an IRA or 401(k), for example, or for a child’s college education. Consider diverting part of that money briefly to your down payment fund.
One caveat: If you are receiving a company match for retirement savings, you may not want to jeopardize that by lowering your contribution.
Don’t touch your emergency fund
When looking at how to save for a down payment, it’s best to avoid taking money from your emergency fund. This nest egg should have three to six months of living expenses in it, and should not be used to fund your down payment. You may need this cushion for repairs or other costs once you own your home, and maintaining a healthy savings account can help you qualify for a mortgage.
Knowing how to save for a house includes establishing a reasonable timeline. Your timing depends on how much you plan to put down and how much you’re able to save each month. Location matters, too, since average home costs vary widely in the U.S. depending on where you live.
If you hope to be in a home sooner rather than later, you may choose to put less money down and settle for a higher mortgage rate or choose a longer mortgage term to achieve your homeowner goals more quickly — just be sure you understand how these tradeoffs affect your total cost of borrowing.
Crunch the numbers: Determine the best course of action with our mortgage down payment calculator
While the down payment is the biggest homebuying expense for most people, there are other costs you need to factor in, including:
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Closing costs: These may include origination fees, title insurance and more. Typically, this is 2% to 5% of the principal amount.
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Mortgage reserves: Your lender may require you to have cash or accessible assets in reserve, amounting to several months of mortgage payments.
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Maintenance and repairs: According to Bankrate’s 2025 Hidden Costs of Homeownership Study, home maintenance costs average $8,808 a year.
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Home insurance: Although not required like car insurance, home insurance offers peace of mind that you’ll have help with catastrophic costs from a fire, hurricane or other covered peril. The average cost of home insurance in the U.S. is $2,424 per year.
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Moving expenses: These vary widely, depending on location and the number of items you are moving. The average cost of hiring professional movers is $1,705, according to HomeAdvisor data.
