How to save up for a house: A complete guide

Saving up to buy a house is hard right now. Nationally, the average time it takes potential home buyers to save up for a down payment is around 7 years – and in dollar terms, down payments have essentially doubled since 2019, largely because home prices have climbed so much. If the numbers have felt discouraging, you're not imagining it.

But how do you save up for a house when home prices keep rising? You actually don't need 20% down to get started, and there are programs, savings approaches, and income strategies that can help close the gap and make homeownership possible.

What costs are associated with buying a house?

A lot of buyers focus on the down payment first, and think: “Once I’ve saved up 20%, I can buy a house.” But closing costs and other expenses associated with buying a home can add thousands more to your total. These are the common costs you should be prepared to pay before buying.

Down payment

A down payment is the money you put toward a home purchase you're financing with a lender. Down payments vary by mortgage type and usually range from 0% to 20% of the purchase price. Put down at least 20% and you'll avoid private mortgage insurance (PMI) on a conventional loan.

But a 20% down payment isn’t necessarily needed to buy a home. The median down payment among all buyers in 2025 was 19%, and for first-time buyers specifically, it was 10% – the highest it's been since 1989, according to NAR.

Even with the dollar amount needed to buy a home increasing, low down payment options exist across most loan programs, giving first-time home buyers a chance at homeownership.

*Currently, USDA loans aren’t available through Rocket Mortgage.

Closing costs

Closing costs are the expenses you pay to finalize a home purchase. They're charged by third parties such as your lender, title company, real estate attorney, and others, and cover the appraisal, title search, underwriting, and prepaid taxes and insurance.

Rocket Mortgage estimates closing costs at 3% – 6% of the loan amount, but the fees vary by lender, loan type, and location. On a $350,000 loan, that's roughly $10,500 – $21,000. Some of these costs are negotiable, and the seller might also agree to cover some of the fees.

Usually, these costs are paid upfront at closing in addition to your down payment, and the total of these costs is called cash to close. In some cases, closing costs can be rolled into your loan to pay off over time.

Other expenses

Beyond the down payment and closing costs, don’t forget to budget for a few more items that are easy to forget about. Your extra costs will depend a lot on home size, how far you're moving, your local market, personal tastes, and what you already own.

• Moving expenses: On average $1,489 – $3,000+ for a local move; long-distance moves run considerably higher, sometimes exceeding $10,000.
• Storage costs: $70 - $300 per month on average, depending on size and location
• Repair and maintenance: Typically 1% – 4% of your home's value per year
• Furnishings and appliances: Around $4000 – $6,000 minimum for a one-bedroom house, up to figures in the $90K range for a larger four-bedroom with premium choices.

How much should I save for a house?

The amount of money you need to buy a home depends on where you're buying, your loan program, and your price range. How much home you can afford is personal – a 3% down conventional loan⁴ on a $350,000 home in the Midwest looks very different from a 20% down purchase in Seattle.

For example: say you're putting 20% down on a $440,000 home–that's $88,000. Add closing costs of 4% of the $352,000 loan amount ($14,000) plus $3,000 for moving and miscellaneous costs, and your minimum target is $105,000.

A home affordability calculator can help you run the numbers for your own situation to give you a better idea of how much to save for a house. One more figure to keep in mind: most financial experts recommend keeping 3 – 6 months of living expenses in a separate emergency fund, even while you're saving for a home. That cushion means an unexpected repair or a gap in employment can still be covered after closing.

9 strategies to save up for a house more quickly

Some savings strategies will apply to your situation more than others, but even implementing a few can help build up your down payment fund faster.

1. Build a better budget

If you’re not sure where your money is going, it will be harder to know what you can contribute to a down payment fund. To budget for a house, start by:

• Calculating your take-home pay. Add up all household income, then pull your bank and credit card statements to see where it's actually going each month.
• Accounting for every recurring expense. List your fixed necessities – rent, student loan payments, groceries, utilities – alongside extra spending like subscriptions and going out to eat. A budgeting app like Rocket Money can help track and categorize everything automatically.
• Making your savings transfer nonnegotiable. After looking at your finances, choose a dollar amount to move toward your down payment each month and build the rest of your budget around it, not after it.

2. Reduce unnecessary expenses

Little extras can add up over time. To save up for a home, look for areas you can cut back on your spending. For example:

• Downsize your current living situation, or go from two cars to one if it makes sense.
• Take a look at your subscriptions. Streaming services, gym memberships, delivery services, and apps you barely use are easy places to free up money.
• Try waiting 30 days for unnecessary purchases: write it down, wait a month, then see if you still want it.
• Cook more during the week and make eating out intentional rather than a habit.
• Try more local vacations instead of expensive trips away. You can still see new places and get a break from your routine without breaking your budget.

3. Ask for a raise or promotion

If you're consistently running low on money before your next paycheck, the issue might be income rather than spending. Look up salary data on job boards to see where your salary compares to the rest of the market. If you're underpaid, you might be able to negotiate.

The best timing to ask for a raise is usually after a measurable win, during your performance review, or when you take on added responsibility. Be specific about what you're asking for and ready to back it up with data and results.

4. Pick up a side hustle

Depending on your schedule and skills, there are solid ways to bring in extra income – even $300 – $500 extra per month adds up to thousands over a year of saving. Some ideas could be:

• Freelance work in your field
• Rideshare or delivery driving
• Tutoring
• Pet-sitting or dog walking
• Testing apps and websites
• Personal shopping, like groceries

5. Rent out your spare room, car, or parking space

If you have an extra bedroom, a car you don’t use very often, or an assigned parking space in a busy area, those can become extra income sources.

Rental marketplaces like Airbnb and Turo let you set your own availability and control the calendar – you can block out dates you need access. If parking is at a premium where you live, apps like JustPark work similarly for empty spaces.

If you’re considering house hacking, short-term rental rules vary by city and building, so make sure to check local regulations and your lease or HOA before listing.

6. Put unexpected cash toward your goal

Commit to saving a portion of any unexpected money that comes your way before you have a chance to spend it: work bonuses, tax refunds, gifts, insurance payouts, inheritances. Even putting half toward your down payment fund can shave months off your savings timeline.

7. Pay down your debt

If you're weighing whether extra money should go toward debt or saving for a home, calculating your debt-to-income ratio (DTI) is a good place to start. Lenders want to see total back-end DTI (your mortgage payment plus all other monthly debt obligations) at 36% or below. Some conventional loans might allow a DTI of 45% to 50% for qualified borrowers with strong compensating factors, like good credit and cash reserves.

The reason DTI is important is that high debt-to-income can limit how much you qualify to borrow, push up your interest rate, or prevent approval altogether. Getting that number down before you apply can make a big difference in the terms you're offered, and in how manageable your monthly payment feels once you're in the home.

Two common debt payoff strategies: the debt snowball method (pay smallest balances first, for momentum) or the debt avalanche method (pay highest-interest debt first, to minimize what you pay overall). If you have high-interest credit card balances, a debt consolidation loan may also be worth looking into. Either way, start by mapping out everything you owe, from credit cards, student loans, auto loans, personal loans, then work from there.

8. Open a dedicated high-yield savings account and automate your savings

One smart way to save for a home is putting your down payment savings somewhere it earns more.

A high-yield savings account (HYSA) earns much higher interest than a standard savings account. These are more commonly offered by online banks, with APYs often ranging between 3% to 5% – beating the FDIC’s national average of 0.38%. The money is fully accessible and liquid, which makes a HYSA a good option for a shorter-term goal like a down payment. Make sure to do your research on current rates and providers from reputable sources before opening an account.

Once you have an account, set up an automatic transfer on payday so your down payment money moves into savings before you have a chance to spend it somewhere else.

Some states also offer first-home savings accounts (FHSAs), which are tax-advantaged accounts specifically to help buyers save for a down payment. Check whether your state offers one and see a tax professional to see if it makes sense for your situation.

9. Look for help with your home savings

• Down payment assistance programs: These are grants and low-interest loans to help cover your down payment and closing costs, usually geared toward first-time buyers or moderate-income households. Availability varies by state and county, so search for programs in your area.
• Gift funds: Friends and family can also help with your down payment. Mortgage programs have specific rules around this though. Usually, you’ll need a gift letter for your mortgage that specifies the funds aren't a loan. Requirements vary by loan type, so check the guidelines for your specific program.
• Individual Development Accounts (IDAs): A lesser-known down payment assistance option is IDAs. These are matched-savings programs, where a nonprofit or government agency matches every dollar you save for a down payment up to a set limit, effectively doubling or more what you put in. Availability varies by location.

FAQ

How much money should I save before buying a house?

At a minimum, plan to cover your down payment (0% – 20% of the purchase price depending on loan type), closing costs (estimate between 3% – 6% of the loan amount), and some cash for moving and early maintenance. It's also a good idea to keep 3 – 6 months of living expenses in a separate emergency fund so you have some cushion as you enter homeownership.

How long does it take to save for a house?

Saving for a house depends on factors like your income, loan amount, and location. But according to a NAR analysis, the average time to save for a house ranges from around 4 – 6 years in affordable Midwest markets to 15 years or more in high-cost metros like San Jose. Buyers using low-down-payment options, like a 3% conventional loan or a 0% VA loan, might be able to reach their saving goals faster by lowering their upfront contribution.

What is the best way to save for a house?

Acting intentionally with your saving strategy, budgeting, and expenses can help with saving for a house. Automate transfers into a high-yield savings account, tighten your budget, pay down debt to improve your mortgage eligibility, and look into down payment assistance programs in your area. If you treat your savings target as a fixed monthly expense, it can help saving for a house feel nonnegotiable.

Can I use a gift to help with a down payment?

Usually you can use gifted funds to help with a down payment. Most mortgage programs allow gift funds from relatives or close friends, but you’ll need to provide certain documents, like a gift letter. A gift letter shows the funds won’t need to be paid back, and also creates a paper trail showing where the money came from. The documents your lender needs will vary by loan type, so check the guidelines for your specific program.

The bottom line: Saving for a house is within reach with the right strategies

First-time buyers are older than ever: in 2025, the median age reached an all-time high of 40, largely because saving for a down payment takes longer when you're dealing with high rents, student debt, and rising home prices. The market is harder to enter than it used to be, but it’s still possible.

Figure out your estimated upfront costs to buy (including closing costs), pick the right loan program for your situation, and put the strategies in this guide to work for you. If that means automating your savings, paying down debt, or tapping into assistance programs you didn't know existed, every dollar put toward your goal counts.

Whether you’re just starting to save or almost ready to buy, reach out to a Home Loan Expert to explore your loan options so you know exactly what you're working toward.

¹Rate pricing and closing costs dependent on loan qualification requirements and factors including but not limited to credit, income, assets, down payment, product selection and loan amount. This is not a commitment to lend.

²Rocket Mortgage is a VA-approved lender, not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency. 

³Rocket Mortgage is not acting on behalf of FHA or HUD.

⁴The 3% down payment option is only available on certain conventional loan products and is not available in all states. Additional terms and conditions may apply.

Rocket Mortgage is a trademark of Rocket Mortgage, LLC or its affiliates.