From first-time homebuyers to empty-nesters looking to downsize, buying a smaller home is well-worth the consideration.
Not only does it come with quite a few financial benefits, but there are a handful of less obvious lifestyle advantages that you might really enjoy.
Let’s dive in!
1. Easier To Save A Down Payment
In most cases, smaller houses come with much smaller price tags than large homes, which means you won’t have to save quite as much money for a down payment.
It takes most people years and years to save up enough money for a down payment on a house. And if you’re following the advice of most financial experts out there, you should be aiming to save at least 20 percent of your home’s cost for a down payment.
By opting for a smaller home, your down payment goal will become much more achievable.
Also, it will probably take you less time to save up, meaning you could achieve your dream of becoming a homeowner much sooner.

2. Smaller Mortgage Payments
The savings benefits of buying a smaller home don’t end with the down payment. In addition, you’ll also have cheaper mortgage payments if you decide to buy a small house.
When you take on a mortgage, it’s easy to feel like you’re giving up a great deal of financial freedom. Knowing you have to continue making payments on your home loan for 15 or more years can be scary and overwhelming.
But, if you buy a smaller, less expensive home, your mortgage payment will be much lighter.
This, in turn, allows you to remain largely in control of your cash flow. Also, you’ll probably be able to pay off your mortgage earlier, which is a fantastic benefit.
We recommend following Dave Ramsey’s guidance on mortgages. This involves making sure your mortgage payments are no more than 25% of your monthly take-home pay.
Luckily, this becomes much more achievable if you buy a smaller house!
3. Cheaper Insurance And Property Taxes
When you buy a home, your mortgage isn’t the only expense you have to think about. You also have to be aware of other escrow costs like property taxes and homeowners insurance. Thankfully, these expenses are usually lower for smaller homes.
Most homeowners insurance policies provide coverage for up to the cost of rebuilding your home. The higher this estimated cost, the higher home insurance premiums you’ll have to pay.
Smaller homes typically require less insurance coverage than larger homes do, allowing you to buy a cheaper insurance policy.
Put simply, a smaller home isn’t just more affordable upfront – it’s easier on your wallet in practically every way.
Looking for a few great ways to save money and improve your financial life? Check out a few of these other articles:
- Should I Downsize My Home To Save Money?
- 21 Ways To Update An Old Home On A Budget
- 25 Ways To Save Money On A Kitchen Remodel
- 21 Ways To Save For A House FAST
- 17 Websites To Buy Affordable Home Décor Online
- 21 Tips For Designing A Home Office On A Budget
- 15 Best Places To Buy Affordable Patio Furniture [Online and In-Person]
- 10 Best Places To Buy An Affordable Rug Online (Without Sacrificing Quality)
4. Easier To Maintain
One of the most underrated benefits of buying a smaller home is how much easier they are to maintain than massive homes.
A smaller home equates to much less energy, money, and effort spent on cleaning, repairs, and general upkeep. In both your indoor and outdoor spaces, you’ll likely have much less work to do to keep your home in good condition.
Even if you plan on hiring help to clean and maintain your home, the cost of these services will likely be much lower.
Since cleaning services, for example, charge by the hour, a smaller space will take less time to clean.
With less time spent on repairs and cleaning the house, you’ll be able to focus on doing the things you love. This could translate into a much better quality of life!
So, before you get attached to the idea of a big home, think about how much time you want to invest in maintaining it. If your answer is “not a lot,” a smaller home is probably a much better option for you.
5. Better Energy Efficiency
Another perk of owning a smaller home is that it requires less energy to keep it comfortable and temperature-controlled. With fewer rooms to light, ventilate, heat, and cool, you’ll save quite a bit of money on energy bills.
According to the U.S. Energy Information Administration, a smaller home under 1,500 square feet saves between $290 and $730 per year compared to an average-sized home’s energy costs.
A smaller energy bill means more money in your pocket to save, invest, and use on other financial priorities.
Because heating and cooling your home won’t cost as much, you’ll be able to keep the whole house comfortable year-round without having to worry about your energy bill.
Also, outfitting your small home with energy-efficient lighting, heating, and other features would be more affordable than it would be for a large house.
6. Less Costly To Upgrade
After living in the same house for a while, any homeowner will tell you that upgrades and renovations are inevitable.
There may come a time when you want to update your home’s styles and finishes, and when that time comes, you’ll be grateful your house is small.
One of the biggest advantages of buying a small home is that renovations and upgrades are much less expensive. A smaller surface area allows you to splurge on higher-quality finishes, countertops, and flooring.
If you have a larger home, you may have to sacrifice the quality of some materials to cover the entirety of your space.
Alternatively, smaller homes allow you to prioritize the quality of your home’s upgrades over quantity. This gives you a greater chance of creating a space you’ll actually enjoy for years to come.
By purchasing a smaller home, you can focus your spending power on making your home exactly how you want it without breaking the bank.
Remember, you don’t have to have tons of square footage to own a home that is beautiful and comfortable.
7. Less Expensive To Furnish
Smaller houses have fewer rooms to furnish, meaning fewer couches, tables, beds, lighting fixtures, and wall hangings you have to purchase. This could end up saving you hundreds (or thousands) of dollars!
Even long after you move into your home, the temptation to fill it with more stuff will probably always be there. But having a smaller space helps you resist the urge to bring more items into your home.
This can encourage you to be more intentional about the pieces you decide to buy, resulting in a clutter-free space that only houses items you actually enjoy.
Having a smaller home can turn you into a more conscious consumer, and this may even spill over into other areas of your life.
In a way, your small space will reinforce responsible spending habits by limiting the amount of physical space you have to store your possessions.
8. More Time Freedom
When you own a smaller home, you don’t have to spend nearly as much time tending to your property. Fewer rooms containing fewer items translate into less time decluttering and cleaning, and more time for your relationships, goals, and hobbies.
Time is your most valuable resource–and there’s no way to create more of it.
While every house requires some regular TLC, few people want to dedicate hours every week to organizing, cleaning, and maintaining their home.
One of the biggest upsides to buying a smaller home is that it gives you time freedom you wouldn’t have otherwise. So, instead of spending the weekend doing chores, you can work on that passion project you’ve been putting off, or pay a visit to a loved one you haven’t seen in a while.
While most people think of a huge house as a luxury, time freedom is priceless! It allows you to be more mindful, focus on what’s most important to you, and truly enjoy your life.
9. Simpler Lifestyle
Another benefit of owning a smaller home is that it allows you to live more simply.
Less space to store your belongings means you’ll be more likely to focus on the essentials.
You’ll be forced to adopt a more minimalist attitude toward your possessions, and this can simplify your life in many different ways.
Without empty space to store a ton of items, you’ll likely live a much more basic, clutter-free lifestyle. People who live in larger houses full of countless possessions often feel overwhelmed and weighed down by the items surrounding them.
By embracing a certain level of simplicity, you may find that life becomes a lot less chaotic and more peaceful.
When you have less storage space, you likely won’t feel as tempted to buy things you don’t need so that your home stays clear and spacious.
10. Easier To Sell
Finally, there may come a time when you wish to sell your home and move somewhere else.
If or when this happens, you may have an easier time selling your small home than you would if you tried to sell a larger one.
Since smaller homes are more affordable, they are available to more home buyers than larger, more expensive houses. This larger selling market can be a great advantage when you start trying to sell your house.
Also, more and more people are recognizing the value of energy efficiency as it helps keep costs down. Since smaller homes tend to be more energy-efficient, this could be a huge selling point.
So, when you decide to move, a smaller home will likely be much easier to sell than a huge house with seven bedrooms. Many homeowners are at the mercy of the housing market when they decide to sell their houses, but you’ll be setting yourself up for selling success by purchasing a smaller home.
Final Thoughts
There are so many benefits of buying a smaller home.
And contrary to what many people believe, you don’t have to have an enormous house to have a wonderful, cozy, happy home.
To be clear, you don’t necessarily have to go all-in and hop on the tiny home trend. But if you want to take some pressure off your financial life, buying a smaller house might be the perfect option for you.