What Is the Average Down Payment for a Home?

One of the biggest hurdles to homeownership is saving up the all-important down payment. It can impact how much house you can afford, what types of loan you use, and how long you need to wait to become a homeowner. So what is the typical down payment amount for home buyers?

What Is a Down Payment?

The down payment is required so that the lender knows that the borrower has saved and given homeownership serious financial consideration. It lowers the risk that the borrower will just walk away from their home and default on paying their loan back.

Average Down Payment Amount

Down Payment Requirements

The minimum required amount of the down payment depends on the type of loan. Here are a few of the most commonly offered mortgage types:

• VA loan: No down payment required. Veterans and current members of the military and National Guard are eligible to use a VA loan.
• USDA loan: No down payment required. You must be purchasing a home in a designated rural or suburban area.

Saving for a Down Payment

No matter what type of loan you plan to use, it is a good idea to save up for a down payment, even if it is not required. You can set up a monthly allotment to your savings account, take on a side hustle, or make lifestyle adjustments to get more money in the bank. This can reduce the amount that you have to borrow and result in more favorable loan terms.