What is the average down payment on a house?

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

One of your top priorities when buying a house is probably having enough cash on hand to make a down payment. You may wonder how much you need to save for a down payment or if buying a home without one is possible.

We’ll look at the typical down payment requirement for different loan types and discuss the average amount that buyers pay upfront so you’ll have an idea of what to expect on your journey to homeownership.

How much is the average house down payment?

The typical down payment on a house for a first-time buyer is about 8% of the home price, while repeat buyers typically put down 19% of the purchase price, according to data available from the National Association of REALTORS® in late 2023.

Of course, your down payment on a house may not be the average down payment on a house. Down payment amounts vary drastically depending on the home price, your loan type and the state of the housing market.

Median down payment by state

Experts typically use medians rather than averages for statistics about down payments. That’s because taking the median prevents very high and very low down payments from skewing the results.

The median down payment differs significantly by state. According to Rocket Homes^SM, the states with the highest median down payments are Hawaii and California. In these states, the median is above $100,000. Washington state, Colorado and Massachusetts also have very high medians, all coming in above $90,000. On the lower end, Iowa, Ohio and Michigan have medians around $35,000. 

How much should you put down on a house?

Minimum down payment requirements differ with the type of loan you choose. Here are the major loan programs and the down payment requirement for each.

Conventional loan

Conventional loans are most often but not always conforming loans, and they’re considered the most common mortgage option. The minimum down payment for a conventional mortgage loan is 3% of the purchase price if you’re a first-time home buyer, and it’s 5% for repeat buyers. However, your lender might require that you put more down if you have a credit score lower than 620 and are still approved (620 is typically the minimum credit score for conventional loan approval).

Conventional loans with a down payment of less than 20% will require you to pay private mortgage insurance (PMI).

VA loan

A Department of Veterans Affairs (VA) loan is a government-backed loan available to eligible current and former members of the Armed Forces and the National Guard, along with surviving spouses who meet certain eligibility criteria. You can buy a home with no money down if you qualify for a VA loan.

USDA loan

A U.S. Department of Agriculture (USDA) loan is a government-backed loan you can use to buy a home in a qualified rural or suburban area. Like a VA loan, a USDA loan allows you to purchase a house with no money down.

Reminder that Rocket Mortgage® doesn’t offer USDA loans at this time.

FHA Loan

A Federal Housing Administration (FHA) loan is a government-backed loan with, at least broadly-speaking, more relaxed requirements than a conventional loan. You can get loan approved by some lenders with a credit score as low as 500, but you’ll need a credit score of 580 or higher to put down only 3.5% at closing. With a credit score in the 500 – 579 range, you’ll need a down payment of 10%.

Down payment amount by purchase price: At a glance

Here are some common down payment percentages – and the dollar amount they translate to – based on different purchase prices.

Is it better to put a large down payment on a house?

Making a larger down payment can seem like a high priority because it typically results in paying less interest over time and eliminating private mortgage insurance (PMI) fees on a conventional loan (assuming the down payment amounts to at least 20% of the purchase price).

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 lead you to spend more money in the meantime.

You could end up paying more in rent, for example, than you would save by eliminating PMI and reducing the amount of interest you pay. You could also end up missing an ideal moment to make a move in a hot housing market.

Getting approved for a mortgage will reveal the kind of terms that the down payment you plan to make will qualify you for.

Do you need 20% for a typical down payment on a house?

The myth of the 20% down payment requirement comes from the PMI requirement on conventional loans. PMI is a type of mortgage insurance that lenders require for their protection in the event that a borrower ends up defaulting on their home loan.

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

Pros of a 20% down payment

Avoiding PMI isn’t the only benefit of putting 20% down on your loan. Other advantages include:

• Access to a lower interest rate
• A smaller loan amount
• Lower monthly mortgage payments
• Less interest owed over the life of the loan

You can save thousands of dollars over time by reducing the amount of money you borrow and the interest you pay on the mortgage loan.

Cons of a 20% down payment

Making a 20% down payment on a house can also come with a few downsides, which may include:

• Needing more time to save for a down payment
• Less money to pay for potential home repairs, new furniture and other necessities
• Depleting your savings or emergency fund

Consider your loan’s requirements along with your financial situation and individual preferences when determining how much you need for a house down payment.

What to consider when making a down payment on a house

There’s no perfect answer to the question of exactly how much you need for a house down payment. Factors to consider when deciding how much to put down on a new home include:

• The minimum down payment requirement for your loan type
• The amount you have in savings
• The condition of your new home and how much you need to spend on repairs
• How close you are to retirement
• Your total debts (credit cards, student loans, auto loans, etc.)

If you can’t afford your down payment, you may qualify for down payment assistance. Down payment assistance programs help many home buyers cover this large upfront cost that often comes with buying a house. Many down payment assistance programs and grants also help cover closing costs, which may include a home appraisal fee, loan origination fee and attorney fee.

The bottom line: The average down payment on a house may differ from yours

As noted earlier, the typical down payment for first-time home buyers in the U.S. is about 8% of the purchase price. However, buying a home with as little as zero down is possible for USDA and VA borrowers, and others can put as little as 3% or 3.5% down in some cases.

The down payment that’s right for you will depend on your individual circumstances and needs. When you’re ready to begin the home-buying process, start your application online with Rocket Mortgage. We’ll help you understand the true cost of your mortgage and identify your most suitable loan options.