Should You Borrow From 401k To Buy A House Apr 2026

Borrowing from a 401(k) to buy a house is a common but risky strategy that allows you to access immediate capital while potentially sacrificing long-term retirement security. While it can bridge a down payment gap, financial experts generally recommend it only as a last resort due to lost compound growth and significant repayment risks if your employment situation changes. Core Mechanics of a 401(k) Loan

A 401(k) loan differs from a withdrawal because you borrow from your account and pay yourself back with interest. Retirement Topics – Plan Loans - IRS should you borrow from 401k to buy a house