How to Save for a Down Payment: The Complete Strategy
A 20% down payment on a $350,000 home is $70,000. Here is how to save it without living like a monk.
The median US home price in 2026 is approximately $350,000. A 20% down payment is $70,000. At $1,000/month saved, that takes 5.8 years. At $1,500/month: 3.9 years. At $2,000/month: 2.9 years. The key is making the number feel achievable, not overwhelming.
Do You Actually Need 20%?
No. FHA loans require 3.5% ($12,250 on $350,000). Conventional loans allow 5% ($17,500). VA and USDA loans require 0% down. The trade-off: lower down payment means PMI (private mortgage insurance) of $100-300/month until you reach 20% equity. PMI is not wasted money — it is the cost of buying sooner.
Where to Keep Your Down Payment Fund
High-yield savings account (4-5% in 2026): best for 1-3 year timeline. CDs: slightly higher rate if you know exactly when you will buy. Not the stock market: too volatile for a 1-5 year timeline. A 20% market crash right before your purchase could delay homeownership by years.