What is the Average Down Payment on a House?

There are many factors to consider when deciding how much to put as a down payment on a house. Some of these factors are out of your control, but there are recommended guidelines to consider. But what is the average down payment on a house?

The Average Down Payment is Less Than You Think

There is a perception that most down payments for new and used homes are around the 20% mark, but this is no longer the case. The advantage of a larger down payment is that you may be able to avoid the PMI (private mortgage insurance) that banks will require for their protection against default. Also, generally speaking, the higher the down payment on a house, the better the terms.

What Factors Affect the Down Payment on a House

There are many reasons for banks to accept different down payment amounts for a house sale. If the buyer has great credit and net worth, they may consider waving the down payment all together. The banks will look at many factors when considering down payment such as, the buyer’s age, prior history of real estate purchases, credit score and net worth. It also varies by location, city and even zip code.

Generally, banks are more flexible when providing a first time mortgage to a younger person who would otherwise not be able to get into a home. By lowering the down payment, while at the same time, increasing the rates and terms, banks hedge their bets on the future earnings of a younger person.

What is the Average Down Payment on a House?

Most people are surprised to find that the average down payment on a house is no where near 20%, and tends to hover around 6% or less, on average. There are a variety of loans available (Conventional, FHA, VA and USDA) and they all have a different benchmark for a down payment based on a variety of factors. It’s important to look at all options when considering a mortgage, the down payment is an important consideration.


Most people continue to assume that a down payment of 20% is required for purchase of a new home. But the days of a 20% down payment are long gone and most new and existing homeowners are finding satisfying terms with as little as 6% down. There are many factors that might increase that requirement, but with the right credit and income, the barrier of a down payment can be avoided.

Leave a Reply