Want to Buy a Home Without a Mortgage? Here's How

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.


  • Most people who buy a home end up needing a mortgage.
  • If you're willing to be flexible, you may find that you can avoid one. 
  • Consider buying a starter or smaller home for less and paying for it outright.

There's no rule stating you have to finance a home purchase.

Mortgages have gotten expensive. Last year, it was more than possible to sign a 30-year mortgage at under 3%, especially with great credit. Nowadays, you might end up paying somewhere around 6% for a 30-year loan.

Unfortunately, most buyers have no choice but to take out a mortgage to finance a home purchase. This especially applies today, what with home prices being higher than they've been in a long time. 

But if the idea of having to pay a higher interest rate on a mortgage doesn't sit well with you, you may be in luck. Contrary to what you may have been led to believe, you're by no means required to sign a mortgage in the course of buying a home. You can opt to purchase a home in cash and avoid a loan altogether.

Now, you may be thinking, "Great, but where am I going to find the cash to buy a home outright?" And if you're looking to buy a larger home, you may have no choice but to take out a mortgage. If you're willing to be flexible, however, and give up some space, you may find that you're able to purchase a home without borrowing money at all.

Look at a starter home

Starter homes tend to be smaller and come with fewer upgrades. But if you're willing to live in one, you might manage to buy one outright without having to take out a home loan.

Of course, this assumes you live in a market with reasonably priced housing. In some parts of the country, a starter home can cost $1 million, and this advice doesn't apply there. But if you're able to buy a starter home for $150,000 and you've been saving money for years, you may have enough to purchase one outright. And then, once you've built some equity in it, you can always look to upsize.

Look at a tiny home

Tiny homes really are tiny, usually ranging from just 100 square feet to 400 square feet. But if you're willing to settle for less space for a few years, you might manage to buy a tiny home without having to so much as contemplate a mortgage. 

The average cost for a tiny home is $30,000 to $60,000. This doesn't mean it's impossible to find one that costs less. And also, a very upgraded tiny home might cost more. But if you're okay with less space, you might have well more than $30,000 to $60,000 socked away for a down payment already, making a tiny home something you can purchase easily on the spot.

A mortgage isn't a given

Living in a tiny home or starter home may require you to make some sacrifices in the course of becoming a homeowner. But on the plus side, you may be in a position to purchase one of these homes outright. 

And remember, you don't have to live in that home forever. And by the time you're ready to upsize, you may find that mortgage rates have dropped down to far more competitive levels than where they are today.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.

Our Research Expert

Related Articles

View All Articles Learn More Link Arrow