Do You Really Need 20% Down to Buy a Home in Chicago?

By Ressie Krabacher

As a local resident and top performing REALTOR® in Chicago, Ressie Krabacher is relentlessly focused on helping her clients move forward. She serves as an advocate and advisor for buying or selling, overseeing relocation, or adding home ownership to their financial goals.

Most people believe they need 20% down to buy a home. According to Kyle Perks of Stonehaven Mortgage, that’s one of the biggest myths in real estate. In reality, today’s average down payment is closer to 7%.

What does that mean for you? It means more buyers can step into homeownership sooner without waiting years to save up.

Years ago, lenders often required 20% down to avoid private mortgage insurance (PMI). But lending guidelines have evolved, and with strong credit, PMI is far more affordable than it used to be. Back in the ‘90s or 2000s, PMI was expensive. These days, with good credit, it’s surprisingly cheap.

This shift has opened doors for buyers who once thought owning a home was out of reach. A 5% or 7% down payment is now typical for many first-time and repeat buyers.

Why waiting could cost you. Buyers who are waiting to save more money might not be the smart move. As home prices rise, the cost of waiting can quickly outpace what you save.

Property values continue to climb, and the longer you wait, the more expensive your dream home could become.

For example, a $500,000 home, putting 20% down versus 5% down, only changes your monthly payment by roughly $600, including PMI. For many buyers, that’s a small difference compared to rising prices and the potential to start building equity sooner.

Plan wisely, buy confidently. Low down payment options don’t just make homes more accessible; they make financial sense for many families. You can invest the difference, keep your savings flexible, and still enjoy homeownership.

If you’ve been holding off because you thought 20% was required, it’s time to rethink your plan. Work with a trusted agent and a qualified lender to explore what’s possible right now.

For mortgage questions or preapproval guidance, reach out to Kyle Perks at Stonehaven Mortgage at (614) 582-0415 or kyle.perks@stonehavenmtg.com. He’s your trusted lending resource.

Buying doesn’t have to wait. Contact me at (773) 965-4100 or ressie@kw.com. You can also check out my website, ressiechicago.kw.com. Let’s explore your options and find the right home for your budget.