Table of Contents
What Is the Average Down Payment On a House?
Mortgage Down Payment Requirements Based on Loan Programs
Average Down Payment on a Home by State
Is a Larger Down Payment Worthwhile?
Average Down Payment on a House Bottom Line
What Is the Average Down Payment On a House?
The average down payment on a house is 12%, which would be around $40,000 for the typical home. However, the average down payment for a house varies by the type of buyer. For example, for first-time homebuyers, the average down payment is closer to 6%, while for repeat buyers, the average is higher, around 16% to 20%.
Mortgage Down Payment Requirements Based on Loan Programs
- USDA Loan Down Payment
- V.A. Loan Down Payment
- FHA Loan Down Payment
- Conventional Loan Down Payment
The minimum down payment requirement varies by lending programs. The following are some of the most popular mortgage programs, along with their respective minimum down payment requirements.
1. USDA Loan Down Payment
USDA loans are mortgages backed by the United States Department of Agriculture. This type of financing necessitates no down payment. To qualify for a USDA loan, however, the home you want to buy must be in a rural or suburban area. Furthermore, there are income requirements that members of your household must achieve in order to qualify for a mortgage down payment reduction.
2. V.A. Loan Down Payment
You do not have to make the customary down payment if you qualify for this sort of loan. However, your eligibility is contingent on a number of factors, including your duration of service in the military and the reason for your dismissal. This loan is intended for the spouses of active military personnel or veterans who died in a service-related accident.
3. FHA Loan Down Payment
These, like VA loans, are backed by the government. This loan program, guaranteed by the Federal Housing Administration, determines a borrower's minimum down payment for a house based on their financial and credit qualifications. Typically, the FHA minimum down payment is 3.5 percent of the home's worth, and you must have a minimum credit score of 580 to qualify.
4. Conventional Loan Down Payment
In recent years, the eligibility conditions for a conventional loan have become heavily reliant on your credit score and financial situation. If your credit score is higher than 620, you may be able to lower your payment. Keep in mind that, while certain conventional loan lenders may want you to put down 6%, the minimum down payment for a conventional loan is 3%. The higher your credit score, the greater your chances of obtaining a favorable loan term.
Average Down Payment on a Home by State
|
State |
Average Down Payment |
|
Rhode Island |
$65,817 |
|
District of Columbia |
$63,537 |
|
Hawaii |
$51,499 |
|
Kentucky |
$44,250 |
|
Maryland |
$43,500 |
|
Alaska |
$36,738 |
|
Delaware |
$36,500 |
|
New York |
$34,998 |
|
Tennessee |
$34,975 |
|
California |
$34,500 |
|
Arizona |
$34,488 |
|
Oklahoma |
$33,525 |
|
Indiana |
$32,900 |
|
Pennsylvania |
$32,136 |
|
Massachusetts |
$30,025 |
|
Kansas |
$30,004 |
|
Minnesota |
$29,999 |
|
New Jersey |
$29,500 |
|
Missouri |
$28,963 |
|
North Dakota |
$28,900 |
|
New Hampshire |
$28,760 |
|
Colorado |
$28,750 |
|
Ohio |
$28,750 |
|
Washington |
$28,600 |
|
Oregon |
$28,001 |
|
Texas |
$27,500 |
|
Florida |
$27,450 |
|
Idaho |
$26,195 |
|
Maine |
$26,150 |
|
Michigan |
$26,088 |
|
Connecticut |
$24,500 |
|
Alabama |
$24,225 |
|
North Carolina |
$24,000 |
|
Georgia |
$23,750 |
|
Nevada |
$23,670 |
|
Iowa |
$23,600 |
|
Louisiana |
$23,575 |
|
Virginia |
$23,125 |
|
South Carolina |
$23,064 |
|
Utah |
$23,050 |
|
Wisconsin |
$21,930 |
|
Arkansas |
$20,525 |
|
South Dakota |
$20,502 |
|
Illinois |
$20,500 |
|
Nebraska |
$20,390 |
|
New Mexico |
$20,250 |
|
Mississippi |
$18,375 |
|
Wyoming |
$17,500 |
|
Montana |
$15,525 |
|
West Virginia |
$13,297 |
|
Vermont |
$11,538 |
Is a Larger Down Payment Worthwhile?
While it is possible to afford the minimum down payment, making a larger down payment has numerous advantages. Here are a few reasons why you might consider putting down a larger deposit on your future property.
- You may not be required to pay for mortgage insurance: If you put down 20% or more on a property with a conventional loan, you won't have to pay for private mortgage insurance (PMI), which protects the lender's interest in the loan if you stop making payments. FHA loans, on the other hand, require an upfront mortgage insurance cost regardless of the amount of your down payment.
- Your loan terms may be more favorable: Lenders typically look at the loan-to-value (LTV) ratio, or what proportion of the home's purchase price would be paid by the loan, when choosing whether to grant a mortgage. Lenders frequently offer better loan terms (interest rate) to borrowers with an LTV ratio of no more than 80% because they believe them to be less risky.
Average Down Payment on a House Bottom Line
The average down payment on a house varies widely but typically ranges from 3% to 20% of the purchase price, depending on the type of loan and the buyer’s financial situation. First-time homebuyers often make smaller down payments, while repeat buyers tend to put down more to reduce monthly payments and avoid mortgage insurance. It’s essential for buyers to evaluate their financial circumstances and explore various loan options to determine the best down payment strategy for their needs.