Young couple signing documents for a house.

What Is The Average Down Payment On A House?

Victoria Araj3-minute read

August 03, 2022

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*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. You may wonder how much you need to save for a down payment, or if buying a home without one is possible.

Let’s look at the typical down payment requirement for different loan types, and the average amount buyers pay so you can get an idea of what to expect.

What Are The Down Payment Requirements For A Mortgage?

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

Conventional loan: A conventional loan is 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 borrowers who are current and former members of the U.S. Military, including the Reserves 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.

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How Much Is An Average Down Payment On A House?

The average first-time buyer pays about 6% for their down payment, while repeat buyers put down 13%, according to data from the National Association of REALTORS®. In other words, you can expect to spend $10,000 – $15,000, but this varies drastically depending on the loan type and the current state of the market. 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. If you can’t afford your down payment, you may qualify for down payment assistance, which helps you pay the fee. 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

Is It Better To Put A Large Down Payment On A House?

Larger down payments can seem like a high priority because they typically cause less interest to be paid over time and eliminate private mortgage insurance (PMI) fees (assuming the payment amounts to 20% of the price or more).

It’s essential, however, to analyze your financial situation to determine whether a large down payment is a good option for you. Waiting until you have enough savings for a large down payment could cause you to pay more in rent than you would save through eliminating PMI and reducing the amount of interest you pay. You could also end up missing a key moment to get into a hot housing market. 

Getting approved for a mortgage will help you understand what kind of terms your intended down payment will qualify you for.  

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Why Do People Say You Need 20% For A Typical Down Payment On A House?

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 if 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 amount, 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 that 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: The Amount Of Your Average Down Payment Depends On The Loan

The average down payment in America is equal to about 6% of the borrower’s loan value. However, buying a home with as little as 3% down is possible, 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 get started, get preapproved with Rocket Mortgage – we’ll help you understand the true cost of your mortgage and identify the best loan options for you.

Get approved to buy a home.

Rocket Mortgage® lets you get to house hunting sooner.

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.