How Much is a Down Payment for a House?
You may have been told that 20% is the magic number when it comes to how much of a down payment you need for a house — but in reality, the upfront financial commitment doesn’t need to be that substantial. In fact, the average down payment on a house varies between 6% and 17%, according to data from the National Association of Realtors (NAR). Ultimately, though the amount you’ll pay will depend on your loan program and financial situation.
What’s the average down payment on a house?
The average down payment on a house varies widely, depending on whether you’re a first-time or repeat homebuyer. Repeat buyers put down 17% of the home’s purchase price on average, while first-timers tend to put down 6% to 7%, according to NAR data.
However, the actual amount you’ll pay depends on a number of factors, including local home values. For example, a recent LendingTree study found that the average down payment amount across the nation’s 50 largest metro areas was $84,499 for the first nine months of 2023. In San Jose, Calif., the nation’s most expensive metro, the average down payment was a staggering $237,600. Meanwhile, in Buffalo, N.Y. — the study’s most affordable metro area — the average down payment was only $47,976.
Do you need to put 20% down on a house?
While making a 20% down payment on a home is considered the gold standard, rising home prices have made this benchmark feel out of reach for many homebuyers.
Luckily, you don’t need to make that sizable of a down payment in most cases. In today’s market, lenders typically require a minimum down payment between 3% and 5%. Depending on your loan program, though, it’s also possible to buy a home with no money down.
Pros and cons of making a larger down payment
While you aren’t required to make a large down payment, there are some potential benefits to putting down more money toward your home purchase. Here’s a closer look at what you should consider as you weigh your options.
| Pros | Cons |
|---|---|
No PMI: Lenders often require buyers to pay for private mortgage insurance (PMI) when they put down less than 20%. Lower monthly payments: When you put more money down, you're borrowing less — this translates into lower monthly mortgage payments. Lower interest charges: Since you're borrowing less to purchase the home, you'll pay lower interest charges over the life of the loan. | Less cash on hand: Making a larger down payment often means that you'll have less money available to make repairs or meet other financial goals, like building an emergency fund. Longer time to save: Putting down 20% often means that your savings goal is fairly big. As a result, it can take longer to become a homeowner. Long-term benefits: Many of the benefits of making a larger down payment are long-term ones. If you're not planning on living in the home for several years, you won't benefit as much. |
What are the minimum down payment requirements?
| Loan program | Minimum down payment requirement | Occupancy requirement |
|---|---|---|
| Conventional | 3% | Primary residence |
| 10% | Second home | |
| 20% | Investment property | |
| Federal Housing Administration (FHA) | 3.5% with a 580 credit score 10% with a score between 500 and 579 | Primary residence |
| U.S. Department of Veterans Affairs (VA) | 0% | Primary residence |
| U.S. Department of Agriculture (USDA) | 0% | Primary residence |
| Jumbo | 20% | Primary residence* |
*Jumbo loans may be available for second homes and investment properties with much higher down payments.
What if you can’t afford the minimum down payment?
There are a few options available if you can’t afford the minimum down payment for your chosen loan program. Specifically, down payment assistance (DPA) programs help buyers shoulder some of their upfront homeownership expenses, including their down payment and closing costs.
DPA programs are often facilitated by federal, state or local housing agencies or nonprofits. Financial assistance is usually offered in the form of grants, loans or tax credits.
You usually have to meet some eligibility criteria to benefit from these programs. Income limits are common, as are other financial requirements like a minimum credit score or maximum DTI ratio. You may also be asked to live in the home for a set number of years or complete homeownership counseling.
Additional considerations when saving for a down payment
- Always shop around for a mortgage: Shopping around can help you secure the best mortgage rate and help you keep more money in your pocket on a monthly basis. It’s a good idea to get a mortgage preapproval from at least three different lenders when you’re in the market for a mortgage.
- Plan for closing costs: You’ll need to plan for closing costs, in addition to your down payment, when buying a home. They usually cost 2% to 6% of your loan amount.
- Don’t forget ongoing costs: Remember to plan for the ongoing costs of homeownership. While your property taxes and homeowners insurance premium will likely be included in your monthly mortgage payment, you’ll still need funds to cover maintenance costs, furnishing the property and making any necessary repairs.
- Leave some extra money in savings: Don’t forget to leave yourself a cushion for contingencies. Experts recommend having three to six months’ worth of living expenses in the bank for emergencies or unexpected expenses.
Frequently asked questions
Your minimum down payment requirement will depend on your loan program. Here are a few estimates for the most common types of mortgages:
- Conventional loan (with PMI): 3% down payment requirement – $9,000
- Conventional loan (without PMI): 20% down payment requirement – $60,000
- FHA loan: 3.5% down payment requirement – $10,500
- VA loan: No down payment required
- USDA loan: No down payment required
If you don’t feel that you can save up enough money on your own, you can look into local down payment assistance programs. Alternatively, you can also ask a trusted family member or friend for a financial gift toward your home purchase.
Like the down payment requirement, the minimum credit score you’ll need to buy a house will depend on your loan program. Here’s a look at what you can expect:
- Conventional loan: A minimum 620 credit score is required.
- FHA loan: A 580 credit score is required for the minimum 3.5% down payment, but if you can make a 10% down payment, you’ll only need a 500 score.
- VA loan: No minimum credit score requirement, though individual lenders may impose their own qualifying standards.
- USDA loan: No minimum credit score requirement, though individual lenders may impose their own qualifying standards.