Depending on the type of financing you choose when you buy a home, you may only need a 3% down payment to qualify for approval. But, if you do put less than 20% down, your lenders will likely require private mortgage insurance (PMI). This policy protects your lender’s interest if you can’t fulfill your mortgage payments.
Because PMI doesn’t apply to rentals, you must have a larger down payment, usually 15% to 20% minimum. However, in some cases, you might need to put more down. For example, if you’re buying a multiunit property, the lender may require 25% down.