What is the average down payment on a house, and do you need 20% down to buy one? In general, buyers often put down less than 20%, and the minimum required down payment depends on the mortgage program.
Nationally, the median down payment was 19% for all buyers, with first-time homebuyers putting down 10% and repeat buyers putting down 23%. Those averages can help set expectations, but they are not the same as minimum loan-program requirements.
FHA loans require far less of a down payment (minimum 3.5% with a 580+ credit score, or 10% with a 500-579 credit score) than conventional loans (minimum 3%). Borrowers who apply for a VA loan may not even require a down payment at all.
National averages are useful for understanding what many buyers typically put down, but they do not tell you how much you personally need to put down to buy a home. Your actual target depends on the loan type you choose, how much cash you want to keep in reserve, and whether you want to reduce mortgage insurance and monthly payments.
This is also where loan-to-value (LTV) comes in. LTV refers to the loan amount borrowed relative to the value of the home being purchased. Lenders use this ratio to assess the lending risk before agreeing to approve a borrower for a mortgage.
The higher the LTV, the higher the risk for the lender. So, the smaller your down payment, the higher your loan amount will need to be, which will also increase your LTV.For example, if a borrower takes out a loan for 80% of the purchase price of the home, they’ll need to make a down payment of 20%. If the borrower takes out a loan for 90%, they’ll need to make a down payment of 10%.
When it comes to conventional loans, the average down payment on a home is anywhere between 5% to 20%. For these types of loans, 3% is the minimum, while 20% is the threshold needed to avoid Private Mortgage Insurance (PMI).
“Conventional” means the mortgage is not guaranteed by the government. However, it should be noted that a 20% down payment isn’t necessary for conventional loans. Buyers can still qualify for a conventional loan with a down payment as low as 3% of the home’s purchase price. The LTV numbers noted earlier are not minimums, but are simply averages.
FHA loans are known for their low down payment requirements. The minimum down payment amount needed to buy a home with an FHA loan is 3.5%.
The VA loan program allows eligible borrowers to avoid down payments altogether. These programs offer 100% financing in many cases, which means borrowers don’t need a down payment in order to buy a house, and many times they don’t need mortgage insurance either.
Having said that, some borrowers might still choose to make a down payment with a VA loan in order to keep their overall loan amount and mortgage payments lower, despite the 100% financing. For eligible VA borrowers, no down payment is required in many cases.
As mentioned earlier, mortgages that are made for more than 80% of the value of a home — which means smaller down payments under 20% — require mortgage insurance. So, if you put a 10% down payment on a home, for instance, you’ll have to add mortgage insurance to your mortgage payments.
The majority of borrowers who apply for FHA loans wind up paying mortgage insurance premiums, which will make monthly payments more expensive. Further, most conventional mortgages with LTV ratios over 80% require private mortgage insurance (PMI).
The VA loan program is different in this regard. Buyers who secure a VA loan to buy a home may be eligible for 100% financing, which means no down payment or mortgage insurance.
At the end of the day, if you make a down payment of less than 20% on a home, odds are you’ll need to pay mortgage insurance. On the positive side, mortgage insurance allows borrowers to qualify for a mortgage with a smaller down payment, which otherwise wouldn’t be possible.
If you’re trying to decide how much to put down, it helps to think in terms of tradeoffs instead of aiming for one universal number. The right target is often the one that balances affordability with financial flexibility.
Target the minimum down payment if keeping more cash on hand is your top priority. This approach can make homeownership possible sooner, but it usually means a higher loan amount, a higher monthly payment, and mortgage insurance in many cases.
Target a moderate down payment if you want to lower your monthly payment without draining your savings. This middle-ground approach may help you reduce your loan balance while still keeping money available for closing costs, moving expenses, repairs, and emergency reserves.
Target 20% or more if avoiding PMI on a conventional loan is a major goal and you can still maintain healthy cash reserves after closing. A larger down payment can also reduce rate sensitivity because you are borrowing less, but it is not always the best choice if it leaves you short on savings.
As you compare these options, consider your expected monthly payment, whether mortgage insurance will apply, how much cash you need for closing costs, and how much you want left over for emergency savings. In many cases, the best down payment is not simply the biggest one you can make — it is the one that lets you buy comfortably while keeping your finances stable after closing.
Sammamish Mortgage can help. We serve clients across Washington, Idaho, Colorado, Oregon, and California. Since 1992, we’ve been providing several mortgage programs and products with flexible qualification criteria to borrowers across the Pacific Northwest. Visit our website to get an instant rate quote or to use our online mortgage calculator. Or, reach out to us if you are ready to get pre-approved for a mortgage.
The median down payment was 19% for all buyers, with first-time buyers putting down 10% and repeat buyers putting down 23%.
No. A 20% down payment is not required to buy a house. Many conventional loans allow as little as 3% down, FHA loans require 3.5% down with a 580+ credit score or 10% down with a 500-579 credit score, and eligible VA borrowers may be able to buy with no down payment.
Many conventional loans allow a minimum down payment of 3% of the home’s purchase price, though putting 20% down can help you avoid PMI.
The minimum down payment for an FHA purchase loan is 3.5% with a 580+ credit score, or 10% with a 500-579 credit score.
VA loans often offer 100% financing for eligible borrowers, which can mean no down payment is required.
LTV (loan-to-value) is the loan amount borrowed relative to the value of the home being purchased, and lenders use it to assess risk.
A smaller down payment generally increases your loan amount and raises your LTV, while a larger down payment lowers your LTV.
Mortgages above 80% LTV, which usually means down payments under 20%, typically require mortgage insurance, such as PMI on conventional loans or mortgage insurance premiums on FHA loans.
Yes. A 20% down payment typically allows you to avoid Private Mortgage Insurance (PMI) on a conventional mortgage.
Some borrowers still choose to make a down payment to reduce the overall loan amount and monthly mortgage payments.
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