Can I Really Buy A Home For Less Than 5% Down?

by Jasmine Cross

Absolutely, you can buy a home with less than 5% down in many cases! Let’s break down how this works and what you need to know.

For many first-time (and even some repeat) homebuyers, the idea of a 20% down payment can feel overwhelming. But the good news is, the North American real estate market—especially in the U.S. and Canada—offers several options for buyers who don’t have a huge chunk of cash saved up.

Low Down Payment Loan Options

Conventional Loans: Some lenders offer conventional loans with as little as 3% down, especially for first-time buyers.

FHA Loans (U.S.): Backed by the Federal Housing Administration, these loans let you put down as little as 3.5%.

VA Loans (U.S.): If you’re a veteran or active-duty military, you may qualify for a VA loan with 0% down.

USDA Loans (U.S.): For rural and some suburban homes, USDA loans also offer 0% down payment options.

CMHC-Insured Mortgages (Canada): In Canada, you can put down as little as 5% on homes under $500,000 with mortgage insurance.

What’s the Catch?

While these programs make homeownership more accessible, there are a few things to keep in mind:

You’ll likely need to pay mortgage insurance, which protects the lender if you default. This adds to your monthly payment.

Your credit score and income still matter. Lenders want to see that you’re financially stable.

There may be limits on the type or price of homes you can buy with a low down payment

Real-Life Example

Imagine you want to buy a $300,000 home. With a 3.5% down payment, you’d need just $10,500 upfront—much more manageable than $60,000 (20%).

In more extreme cases, there are down payment assistance programs that could bring your entire out of pocket costs to under 3% alone!

That includes:

Loan Origination Fees
Appraisal
Inspection
Broker/Agent Fees
Title & Escrow

Is It Right for You?

Buying with less than 5% down can be a smart move, especially if you’re eager to start building equity instead of paying rent. Just be sure to consider the total monthly payment, including insurance and taxes, and talk with a mortgage professional to find the best fit for your situation.

If you’d like to learn more about specific programs or see what homes you could afford with a low down payment, let me know! I’m here to help you explore your options.

Would you like tips on how to qualify, or want to see listings that fit a low down payment scenario?