How to Save for a Down Payment — Without Feeling Overwhelmed

Buying a home is a major milestone — but saving up for the down payment doesn’t have to be intimidating. Whether you're looking to stop renting or trying to fast-track your journey to homeownership, there are several smart and manageable ways to save.

In a recent Zillow article by May Ortega, the team breaks down how everyday people can successfully prepare for one of the biggest financial moves of their lives. We’ve summarized some of the key takeaways and added tips on how Prime 1 Realty can support your journey — including our own mortgage calculator to help you run the numbers with confidence.

1. Know How Much You Need

Start with clarity. Use your target home price to estimate how much you’ll need to save. Contrary to the outdated belief that you need 20% down, Zillow’s research shows nearly half of mortgage borrowers put down less than 20%. For many first-time buyers, 5% is a more realistic goal.

Use our Prime 1 Realty Mortgage Calculator to estimate your monthly payments, down payment amount, and more — based on your budget and today’s mortgage rates.

2. Automate Your Savings

Consistency is key. Set up automatic transfers to a high-yield savings account. Even modest monthly savings can add up over time — and earn interest along the way. For example:

3. Look Into Down Payment Assistance

Many buyers qualify for down payment help through state, county, or nonprofit programs. FHA loans often pair well with these resources. Not sure where to start? Our team at Prime 1 Realty is happy to connect you with trusted local lenders who specialize in assistance programs.

4. Cut Back (Temporarily)

Lowering your living expenses for a short time can free up cash to save more aggressively. This might mean:

• Downsizing or getting a roommate

• Canceling unused subscriptions

• Cooking at home more often

• Hosting friends in instead of going out

These are small sacrifices with a big payoff: your dream home.

5. Explore Extra Income Opportunities

From gig work to monetizing hobbies, even a few hours a week can boost your savings. Freelance, drive, deliver, dog-sit, or turn that weekend passion into a source of extra income.

6. Consider a Gift Fund

According to Zillow, 38% of buyers used money from friends or family for their down payment. It’s becoming more common to ask for home fund contributions in lieu of gifts for weddings or birthdays. (Pro tip: this can be done thoughtfully and tactfully.)

Your Next Step: Run the Numbers

Use our mortgage calculator to see how much you need to save and what kind of home you can afford — no guesswork required. Whether you’re just starting out or getting close to your goal, we’re here to help make your homeownership dream a reality.

This post is based on “How to Save for a Down Payment” by May Ortega, originally published by Zillow on January 7, 2025. View the full article here.