The median down payment is between 6 and 7 percent, but the number that matters is what you can afford to put down right now

The average down payment varies depending on who is buying. First-time buyers put down a median of 6 to 7 percent of the home price. Repeat buyers—people selling one house to buy another—often put down 15 to 20 percent because they have equity from their previous home. Cash buyers put down 100 percent. None of these numbers is a requirement; they are what people actually do, based on their savings and their loan options.

The down payment you need depends on the loan type you may have access to for, not on what the average buyer does. A conventional loan typically requires 3 to 20 percent down. An FHA loan requires 3.5 percent down. A VA loan (for military members and veterans) requires 0 percent down. A USDA loan (for rural properties) also requires 0 percent down. If you have 3 percent saved, you can buy with a conventional loan. If you have nothing saved, you may still may have access to for a VA or USDA loan if you meet the other requirements.

Key Takeaways

  • First-time buyers put down a median of 6 to 7 percent; this is what people do, not what you must do.
  • Your actual down payment depends on your loan type: conventional loans start at 3 percent, FHA at 3.5 percent, VA and USDA at 0 percent.
  • A smaller down payment means a larger loan and higher monthly payments, but it lets you buy sooner if you have limited savings.
  • Putting down less than 20 percent on a conventional loan triggers mortgage insurance, which adds to your monthly cost until you reach 20 percent equity.
  • The down payment is separate from closing costs, which typically run 2 to 5 percent of the home price and are due at signing.

How down payment size changes your monthly payment

A smaller down payment lowers the amount you need to save before you can buy, but it raises your monthly mortgage payment. On a $300,000 home, putting down 3 percent ($9,000) means you borrow $291,000. Putting down 20 percent ($60,000) means you borrow $240,000. The difference in principal is $51,000, which translates to roughly $300 more per month over a 30-year loan at current rates.

The trade-off is real: you can buy sooner with less money down, but you pay more each month. Some buyers choose to put down less and buy now; others save longer and put down more to lower their monthly cost. Both are valid strategies. The key is understanding what you can afford to pay each month, not what the average buyer puts down.

Mortgage insurance when you put down less than 20 percent

If you put down less than 20 percent on a conventional loan, your lender requires private mortgage insurance (PMI). This is an insurance policy that protects the lender if you stop paying. You pay the premium as part of your monthly mortgage payment—typically 0.5 to 1.5 percent of the loan amount per year, depending on your credit score and how much you put down.

PMI is not permanent. Once you reach 20 percent equity in the home (either by paying down the principal or by the home appreciating), you can request that PMI be removed. Some lenders remove it automatically once you hit that threshold; others require you to ask. Check your loan documents to see which applies to you. If you put down 3 percent and the home appreciates, you may reach 20 percent equity in five to ten years, at which point PMI drops off and your payment falls.

Down payment assistance programs and where to find them

Many states, counties, and nonprofits offer down payment help for first-time buyers. These programs vary widely: some give you a grant (money you do not repay), some offer a low-interest loan, and some do both. The amount ranges from a few thousand dollars to 15 or 20 percent of the purchase price, depending on the program and your income.

To find programs in your area, start with your state housing finance agency (search "[your state] housing finance agency" online) or contact a HUD-approved housing counselor through the National Foundation for Credit Counseling or NeighborWorks. Many programs have income limits and require you to complete a homebuyer education course, but the course is often free and can be done online. If you are a veteran, the VA loan program itself requires no down payment and no PMI.

Closing costs are separate from your down payment

The down payment is not the only money you need at closing. Closing costs—which include the appraisal, title search, title insurance, attorney fees, and lender fees—typically run 2 to 5 percent of the home price. On a $300,000 home, that is $6,000 to $15,000 on top of your down payment.

Some buyers roll closing costs into the loan (which means you pay interest on them over 30 years). Others negotiate with the seller to cover part of the closing costs. Some lenders offer no-closing-cost loans, which means the lender covers the costs but charges you a higher interest rate. Ask your lender what options are available to you. The total cash you need at closing is your down payment plus closing costs, minus any seller contribution or lender credit.

Why down payment size matters less than you think

The down payment gets attention because it is the biggest chunk of cash you need upfront. But your monthly payment depends on three things: the loan amount, the interest rate, and the loan term. A buyer who puts down 3 percent but has an excellent credit score and gets a low interest rate may pay less per month than a buyer who puts down 10 percent but has a lower credit score and a higher rate.

Your credit score, debt-to-income ratio, and income stability matter more to lenders than your down payment size. If you have limited savings but strong credit and stable income, you may may have access to for a 3 percent down conventional loan or an FHA loan at a competitive rate. If you have savings but weak credit, you may need to put down more to offset the risk to the lender. Focus on what you can afford to pay each month and what down payment gets you there, rather than chasing the average.

Frequently Asked Questions

Can I buy a house with no money down?

Yes, if you may have access to for a VA loan (military or veteran) or a USDA loan (rural property and income limits apply). Conventional and FHA loans require at least 3 to 3.5 percent down. Some down payment assistance programs can cover part or all of your down payment if you meet their income and location requirements.

What happens if I put down more than 20 percent?

You avoid PMI entirely, which lowers your monthly payment. You also borrow less, so you pay less interest over the life of the loan. The trade-off is that you tie up more cash upfront. Some buyers prefer to put down 20 percent and invest the rest; others prefer to put down more and own the home faster.

Can the seller pay my down payment?

No, but the seller can contribute toward your closing costs, which frees up your cash for the down payment. The amount the seller can contribute varies by loan type—conventional loans typically allow 1 to 3 percent of the purchase price, while FHA loans allow up to 6 percent. This is negotiated as part of the offer.

Does a larger down payment mean a lower interest rate?

Not directly. Your interest rate is set by the lender based on your credit score, debt-to-income ratio, the loan type, and current market rates. A larger down payment does lower your risk to the lender, which may help you may have access to for a loan if your credit is borderline, but it does not automatically lower your rate.

What if I do not have enough for the down payment yet?

You have several options: save longer, look for down payment assistance programs in your area, consider a loan type with a lower down payment requirement (FHA, VA, or USDA), or negotiate with the seller to cover closing costs so more of your savings can go toward the down payment. A HUD-approved housing counselor can review your situation and point you toward programs you may not know about.