What's the Typical Down Payment on a House?
A down payment is one of the biggest upfront costs when buying a home, but how much do homebuyers actually put down? The answer varies more than many people expect, and it depends heavily on the loan type, buyer profile, and local market.
The 3% or 5% down payment is still available for many buyers, but it isn't representative of what's happening across the market as a whole. Recent housing data has shown that repeat buyers often put down substantially more than first-time buyers, in part because they may have equity from a previous home to apply toward the purchase.
Many homebuyers, however, purchase with far less than the figures repeat buyers bring to the table. Understanding where you fall in that range starts with knowing your loan options.
No. Many homebuyers purchase with less than 20% down, especially first-time buyers. A 20% down payment is often discussed in the context of avoiding private mortgage insurance (PMI), not as a universal qualification requirement.
The median down payment for first-time buyers tends to be well below 20%, and many loan programs allow significantly lower down payments for eligible borrowers.
Down payment amounts can vary significantly depending on the loan program. Here's a general overview.
Conventional loans typically require relatively low down payments for qualified borrowers. However, many buyers choose to make a larger down payment to reduce their monthly payments or to avoid private mortgage insurance. A 20% down payment is often linked to avoiding PMI rather than meeting minimum qualifications. Additionally, many conventional programs permit down payments of less than 20% based on the borrower and lender.
FHA loans may allow a down payment as low as 3.5% for eligible borrowers who meet minimum credit score requirements. Borrowers with credit scores between 500 and 579 may qualify with a 10% down payment, subject to lender requirements. For buyers who don't have a large down payment saved, FHA loans are often part of the conversation.
VA loans can offer zero-down financing for eligible active-duty service members, veterans, and qualifying family members. Although no down payment may be required, some buyers still choose to make one depending on their budget, monthly payment goals, or overall financing strategy. VA loan availability and terms vary by lender.
USDA loans may offer zero-down financing for eligible buyers in qualifying rural and some suburban areas, through participating lenders. Income limits and geographic eligibility requirements apply.
First-time homebuyers typically put down less than repeat buyers, largely because accumulating a large down payment is one of the biggest barriers to entry. Many first-time buyers rely on a combination of personal savings, family gifts, and down payment assistance programs.
Repeat buyers, in contrast, often make significantly larger down payments—often because they are using equity from a previous home sale towards their next purchase.
There's no single right answer. If you can put down 20% without significantly depleting your savings, that may help you avoid mortgage insurance and reduce your monthly payment. Many buyers opt to make a smaller down payment to preserve savings for closing costs, repairs, reserves, or emergencies. This is a reasonable approach, depending on one's financial situation.
Many financial advisors recommend maintaining three to six months' worth of expenses in savings after purchasing a home. This is an important factor to consider in your decision.
Ultimately, the right down payment is one that makes homeownership affordable both at closing and over the long term.
Both approaches come with trade-offs worth understanding before you decide.
A wide range of down payment assistance programs exists nationwide to help buyers cover all or part of their upfront purchase costs. These programs are typically provided by state housing agencies, local governments, nonprofits, and employers. They often come in the form of grants, forgivable second loans, or deferred-payment loans. Eligibility, availability, and benefit amounts vary by program, location, and borrower circumstances, and programs can change over time.
Some assistance programs can be used alongside FHA loans, depending on program rules, borrower eligibility, and lender requirements.
Examples of assistance programs that have been available in various markets include:
Program details, benefit amounts, and availability are subject to change. Buyers should verify the current program terms directly with the administering agency or a participating lender before making decisions based on the availability of assistance.
