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What Is The Average Down Payment On A House?

Victoria Araj6-minute read

January 20, 2022


*As of July 6, 2020, Rocket Mortgage® is no longer accepting USDA loan applications.

One of the first things on your mind when buying a house is probably the down payment requirement. How much do you need to save for a down payment? Is it possible to buy a home without one?

Let’s take a look at the typical down payment required for different loan types and what the average buyer pays, so you can get an idea for what to expect.

What Are The Down Payment Requirements For A Mortgage?

Different loans have different minimum down payment requirements. Here are the major loan types and the down payment requirements of each.

Conventional loan: Conventional loans are the most common type of mortgage loan. The minimum down payment requirement for a conventional loan is 3%. However, your lender might require that you put a larger percentage down if you have a credit score lower than 620 or a lot of debt.

VA loan: A VA loan is a government-backed loan available to eligible current and former members of the Armed Forces and the National Guard. You can buy a home with no money down if you qualify for a VA loan.

USDA loan: A USDA loan is a government-backed loan that you can use to buy a home in a qualified rural or suburban area. Like a VA loan, a USDA loan can allow you to buy a home with no money down. Rocket Mortgage® does not offer USDA loans at this time.

FHA loan: An FHA loan is a government-backed loan with lower financial and credit requirements than a conventional loan. You can buy a home with an FHA loan as long as you have at least 3.5% down at closing.

What Is The Average Down Payment On A House?

The average American pays about 6% for their down payment, according to data from Attom Data Solutions. However, keep in mind that there’s no right or wrong answer when it comes to how much you need to have as a down payment to buy a house. Some things to consider when you think about how much you want to put down include:

  • The minimum down payment requirement for your loan type
  • Your emergency fund (or lack thereof)
  • The condition of your home and how much you need to spend on repairs
  • How close you are to retirement
  • Your other debts

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Why Do People Say You Need 20% Down?

The myth of the 20% down payment comes from the private mortgage insurance (PMI) requirement. PMI is a type of insurance that protects your lender in the event that you default on your loan. Most lenders require that you pay for PMI if you bring less than 20% down to your closing meeting, though PMI doesn’t protect you at all – it protects the lender.

While you’ll need to pay PMI if you have a lower down payment, you can request to cancel your insurance once you reach 20% equity in your home on a conventional loan.

There are a few other benefits to putting 20% down on your loan. You may have access to lower interest rates and your monthly payment will be lower as well. You can also save thousands of dollars over time by reducing the amount of money you borrow and the interest you pay.

Saving for a large down payment can take time. Keep in mind, you may leave yourself with less money for repairs and renovations later on when you put more money down.

Consider your loan requirements, your financial situation and your individual needs when you decide how much you want to put down on your mortgage loan.

The Bottom Line On Average Down Payments

The average down payment in America is equal to about 6% of the borrower’s loan value. However, it’s possible to buy a home with as little as 3% down depending on your loan type and credit score. You may even be able to buy a home with no money down if you qualify for a USDA loan or a VA loan. Different loan types have different minimum down payments.

The specific down payment that’s right for you will depend on your individual circumstances. When you’re ready to buy a home, talk to a Home Loan Expert at Rocket Mortgage.

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Victoria Araj

Victoria Araj is a Section Editor for Rocket Mortgage and held roles in mortgage banking, public relations and more in her 15+ years with the company. She holds a bachelor’s degree in journalism with an emphasis in political science from Michigan State University, and a master’s degree in public administration from the University of Michigan.