The median down payment is around 6 to 7 percent for first-time buyers, and 10 to 20 percent for repeat buyers
The number varies sharply depending on who is buying. First-time buyers in the United States typically put down between 3 and 7 percent of the purchase price. Repeat buyers — people who have owned a home before — tend to put down 10 to 20 percent. The variation matters because it changes what loan programs you can use, what your monthly payment looks like, and whether you will pay mortgage insurance.
These are not rules. They are patterns from actual transactions. Some buyers put down 20 percent or more. Some put down less than 3 percent. The range depends on the loan program you choose, how much cash you have, what the lender will accept, and what makes sense for your situation.
Key Takeaways
- First-time buyers typically put down 3 to 7 percent; repeat buyers put down 10 to 20 percent, though both groups vary widely.
- A down payment below 20 percent usually means you will pay mortgage insurance, which adds to your monthly cost.
- FHA loans allow down payments as low as 3.5 percent; conventional loans often require 5 to 20 percent depending on the lender.
- The down payment you choose affects your interest rate, monthly payment, and total cost over the life of the loan.
- Your actual down payment depends on your cash available, the loan program, the lender's requirements, and your financial goals.
Why the range is so wide
Down payment size is not set by law or by a single standard. It is negotiated between you and the lender, within the bounds of the loan program you choose. An FHA loan allows 3.5 percent down. A conventional loan might require 5 percent from one lender and 20 percent from another. A VA loan (for military members and veterans) often requires zero down. A USDA loan (for rural properties) also often requires zero down.
The lender's risk tolerance matters. If you put down a smaller percentage, the lender is lending you a larger share of the home's value. To offset that risk, they may charge you a higher interest rate, require mortgage insurance, or both. If you put down 20 percent or more, you are taking on more of the risk yourself, and the lender's terms often improve.
What mortgage insurance costs and when you pay it
Mortgage insurance is a monthly fee added to your payment when your down payment is below 20 percent. It protects the lender if you stop paying, not you. The cost varies by loan type and down payment size, but typically ranges from 0.5 to 1.5 percent of your loan amount per year, paid monthly.
On a $300,000 home with a 5 percent down payment ($15,000), you would borrow $285,000. Mortgage insurance might add $150 to $350 per month to your payment. That cost stays until you have paid down the loan to 80 percent of the home's original value, or until you refinance.
FHA loans require mortgage insurance regardless of down payment size — even at 20 percent down. Conventional loans do not, once you reach 20 percent equity. This is one reason some buyers choose conventional loans when they can afford a larger down payment.
How down payment size affects your interest rate
Lenders typically offer lower interest rates to borrowers who put down more money. The difference is usually small — perhaps 0.25 to 0.5 percent — but it compounds over 30 years. On a $300,000 loan, a 0.5 percent rate difference can mean $50,000 or more in total interest paid.
The relationship is not linear. The biggest rate drop usually comes when you cross the 20 percent threshold, because that is when mortgage insurance disappears. Moving from 5 percent to 10 percent down might lower your rate by 0.1 percent. Moving from 15 percent to 20 percent might lower it by another 0.2 percent. The exact numbers depend on the lender, the loan program, and current market conditions.
Down payment by loan program
| Loan Program | Typical Down Payment Range | Mortgage Insurance Required |
|---|---|---|
| FHA | 3.5 to 10 percent | Yes, always |
| Conventional | 3 to 20 percent (varies by lender) | Yes, below 20 percent |
| VA | 0 percent | No |
| USDA | 0 percent | No |
| Jumbo (loans above conforming limits) | 10 to 20 percent | Varies by lender |
FHA loans are designed for first-time buyers and borrowers with lower credit scores. The 3.5 percent minimum down payment is the lowest widely available option. The trade-off is that mortgage insurance is mandatory and stays for the life of the loan if you put down less than 10 percent.
Conventional loans are offered by banks, credit unions, and mortgage companies. They are not insured by a government agency. Lenders set their own minimum down payment requirements, which range from 3 to 20 percent. Most require at least 5 percent. Mortgage insurance is required below 20 percent but can be removed once you reach that threshold.
VA and USDA loans require zero down payment for borrowers who meet their criteria. VA loans are for military members, veterans, and some surviving spouses. USDA loans are for rural properties and borrowers with moderate incomes. Both programs have their own qualification rules and fees.
What happens if you put down less than you could afford
Putting down a smaller percentage lets you buy sooner or buy a more expensive home with the same cash. The cost is a higher monthly payment (because you are borrowing more) and mortgage insurance (if below 20 percent). Over 30 years, this can add tens of thousands of dollars to what you pay.
Putting down more than the minimum reduces your monthly payment, removes mortgage insurance sooner, and lowers your total interest cost. The trade-off is that the money is locked into the home's equity and is harder to access if you need cash. There is no single right answer — it depends on your cash reserves, your income stability, and your other financial goals.
Frequently Asked Questions
Is 20 percent down still the standard?
No. Twenty percent is the threshold where mortgage insurance stops, which makes it a common target, but most first-time buyers put down less. The median is closer to 6 to 7 percent. Twenty percent is more common among repeat buyers and people with substantial savings.
Can I use a gift for my down payment?
Yes, most loan programs allow down payment gifts from family members. The lender will require a signed letter stating the money is a gift, not a loan you have to repay. Some programs limit how much of your down payment can be a gift; others allow 100 percent. Ask your lender about their specific rules.
What if I can only put down 3 percent?
You can use an FHA loan (3.5 percent minimum) or a conventional loan with a 3 percent down payment option, if a lender offers it. Both require mortgage insurance. Your monthly payment will be higher than if you put down more, but you will own the home sooner than if you waited to save more.
Does a larger down payment help me get approved?
Yes, generally. A larger down payment reduces the lender's risk, which can help if your credit score is lower or your income is borderline. It may also get you a better interest rate. However, approval depends on multiple factors — income, credit, debt, employment history — not just down payment size.
Can I put down more than 20 percent?
Yes. Putting down 25, 30, or 50 percent is common among buyers with substantial savings. The benefits are a lower monthly payment, no mortgage insurance, and a lower interest rate. The trade-off is less liquid cash available for emergencies or other goals.