This map shows how long it takes Americans to save for a 20% vs. 5% down payment

Core Insights - A 20% down payment is considered the standard for home purchases, helping buyers avoid private mortgage insurance (PMI), but many lenders accept lower down payments, such as 5% [1][10] - The time required to save for a 20% down payment varies significantly by state, with the largest discrepancies found in Washington, D.C., and Hawaii, where the difference is 33 years, while Iowa has the smallest difference at 10 years [5][6] - While a 20% down payment can lead to lower interest rates and total interest paid, it may not be practical for all buyers, especially if it takes decades to save [7][8] Down Payment and PMI - PMI is a fee added to monthly mortgage payments for loans with less than a 20% down payment, serving as insurance for lenders against borrower default [2][3] - The cost of PMI can range from 0.20% to 2% of the original loan amount annually, with specific examples illustrating potential costs based on loan amounts [3][12] - PMI can be canceled once the borrower reaches 20% equity in their home or when the loan balance reaches 78% of the property's original value [4] Alternatives to 20% Down Payment - Many first-time home buyers put down significantly less than 20%, with the typical down payment in 2024 being only 9% [9] - Various mortgage options exist for lower down payments, including conventional loans with as little as 3% down, FHA loans with 3.5% down, and zero-down options through USDA and VA loans [11][13] - Down payment assistance programs are available through government agencies and some lenders, providing grants and loans to help buyers with upfront costs [13]