Average House Down Payment Guide

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?
Final Words on Average Down Payments

What Is the Average Down Payment On a House?

According to a National Association of Realtors (NAR) report on house purchase patterns in the United States for 2022, the average down payment for all buyers was 12 percent, which would be around $36,000 for the typical home. However, the average down payment for a house varies by state, as price differences between different states can be dramatic. 

Mortgage Down Payment Requirements Based on Loan Programs

1. USDA Loan Down Payment
2. V.A. Loan Down Payment
3. FHA Loan Down Payment
4. 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

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 House Down Payments Bottom Line

The average down payment in America is approximately 6 -15 percent of the loan value for a typical borrower. However, depending on your loan type and credit score, you may be able to purchase a home with as little as 3% down. 

If you qualify for a USDA loan or a VA loan, you may even be able to buy a home with no money down. Before settling on a certain down payment, evaluate your financial circumstances, the condition of the home, and your previous debts.