10 Percent Down Payments are Back
2026
10 Percent Down Payments are Back
Remember the 10 percent down payment on a house? It’s back.
Before the recent credit crisis, getting a home loan was easy. Your down payment was small—if you even had to make one. To qualify, all you had to do was “state” your income and sign on the dotted line.
That was the kind of lending that got us into the credit crisis, of course. After the bust, lenders started requiring at least 20 percent down. Unfortunately, coming up with that much money was often a stumbling block for would-be homebuyers. In addition, buyers were already worried about the economy or their jobs. So buying a home was not only difficult—it was pretty terrifying.
The result: Even though home prices plunged and mortgage rates were at historic lows, many potential buyers were forced to sit on the sidelines for years.
That was then. Today, many real estate markets around the country are heating up again. While the economic recovery is still uneven, people are feeling confident about their jobs. They’re out looking for homes to buy again.
Mortgage lenders see these trends, too, and are now easing up on the 20 percent down restriction. This time around, though, lenders are much more cautious about who gets to put 10 percent down. To qualify, your monthly housing, car, student loan, and credit card debt can’t be higher than 45 percent of your monthly income. And you must have a credit score above 700.
Even if you have the 20 percent to put down, you might consider opting for a 10 percent down payment anyway. For example, if you’re buying a home that needs renovation, you could put 10 percent down and use the other 10 percent for improvements. Or you could invest that 10 percent in stocks or mutual funds, though that’s obviously risky.
A 10 percent down payment has disadvantages. If you put 10 percent down and home prices decline later, you could end up owing more than your home is worth. And then you’d be stuck in your home, unable to sell.
Also, if you have little equity and you go to sell, you could face another problem. The size of your loan, along with the costs of selling your property, could total more than the sale price.
If you qualify for a 10 percent down payment, and it’s the only way you can get into a home, it may be worth the risks. But always talk to your mortgage professional and real estate agent first. Think strategically and long-term. Don’t make a 10 percent down payment just because you can.
