Everything You Need to Know About Down Payments

What is a down payment?

• A portion of the price of a home that’s paid in cash
• Price of Home - Down Payment = Loan
• Expressed as a percentage of the total purchase price
• Percentage required to pay is dictated by the terms of your loan

How much should I put down on a house?

Ideal Down Payment = 20% of the purchase price of a home

Why 20%?

• Reduce your monthly mortgage payment
• Eliminate costly private mortgage insurance (PMI)
• Reduce interest rates
• Improve the competitive nature of your offer

What is the average down payment on a house?

• Typical down payment in 2021: 10-19% of the purchase price
• 59% of buyers put down less than 20%

What is the minimum down payment for a house?

Depends on the loan you’re using to finance the house

• Conventional loan minimum down payment: 3%
• FHA loan minimum down payment: 3.5%
• VA loan minimum down payment: 0% 
• USDA loan minimum down payment: 0%