If you're financing the purchase of your house, your down payment is the amount you put up front in cash. The remainder is the mortgage, provided by a lender and typically paid off in monthly installments.
Down payments are represented as a percentage of the home price: For example, a $40,000 upfront payment on a $200,000 house is a 20% down payment.
For most mortgages, a down payment is required because it shows a lender that the buyer has a financial investment in the property and is less likely to default on the loan.
While a 20% down payment will save you from having to pay private mortgage insurance, most first-time homebuyers put far less down.
How much is a down payment for a house?
The size of your down payment depends on your lender, the loan type and your financial situation.
In 2024, the median down payment for first-time homebuyers was just 9%, according to the National Association of Realtors. For repeat buyers, who can often use proceeds from the sale of their existing home, the average was 23%.
The median down payment for all buyers, new and repeat, was 18%.
But lenders will accept much less: Most conventional loans only require 3% to 5%. If you have a credit score of at least 580, you can be approved for a government-backed with a down payment of 3.5%.
Other government-guaranteed mortgages, like USDA and VA loans, require no down payment.
There are also down payment assistance programs to help homebuyers: Freddie Mac's DPA One guide includes hundreds of programs that provide grants, low—and no-interest loans and other support.
The 20% down payment rule emerged during the Great Depression, when nearly half of the mortgages in urban areas fell delinquent. Although the economy recovered, many lenders still mandated 20% down well into the 1950s and 1960s.
The advent of private mortgage insurance (PMI) in the late 1950s, however, meant lenders could be protected if a borrower defaulted. In 1971, the Federal Home Loan Bank Board allowed savings and loans to approve conventional mortgages with as little as 5% down with PMI.
Today, if you put down less than 20% down on a conventional loan, you'll likely be required to obtain PMI, which can cost 0.50% of your mortgage on average. You'll keep making PMI payments until you reach 20% equity in your house.
Benefits of a smaller down payment
A smaller down payment will get you into your home quicker and leave you more money to cover repairs and insurance and to invest in other financial goals.
With its ONE+ loan, Rocket Mortgage will contribute up to 2% of the home price for the down payment if the borrower puts 1% to 2.99% down. This means that homeowners who qualify for the loan can buy a house with a down payment of as little as 1%. Those who apply must make no more than 80% area median income or live in certain zip codes throughout the U.S.
Rocket Mortgage
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages are available.
Types of loans
Conventional loans, FHA loans, VA loans, Jumbo loans, low-down-payment mortgages
Terms
10-, 15- and 30-year fixed-term conventional loans, 30-year VA and FHA loans, custom mortgages with fixed-rate terms from 8 to 29 years.
Credit needed
620 for conventional loans
Minimum down payment
0% for VA, 1% for RocketONE+, 3% for conventional, 3.5% for FHA, 10% to 15% for jumbo
Already have a mortgage through Rocket Mortgage or looking to start one? Check out the Rocket Visa Signature Card to learn how you can earn rewards.
Read our review of Rocket Mortgage
Chase Bank's DreaMaker loan also allows borrowers to make a 3% down payment, and you can earn a discount with a Chase checking or savings account. In some states, Chase will provide qualified applicants with a grant of up to $7,500 toward a down payment or closing costs.
Chase Bank
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans
Conventional loans, FHA loans, VA loans, DreaMaker℠ loans and Jumbo loans
Terms
10 – 30 years
Credit needed
620
Minimum down payment
3% if moving forward with a DreaMaker℠ loan
Terms apply.
Offers first-time homebuyer assistance?
Yes — click here for details
If you do make a smaller down payment, you'll start out with less equity in your home.
Benefits of a larger down payment
A bigger down payment makes borrowers more attractive to mortgage lenders, earning you a lower interest rate and fewer fees. If you have 20% available, you can probably avoid paying mortgage insurance.
A bigger down payment also means you'll own more equity in the home right away. If you expect to refinance, you'll typically need 20% home equity.
Calculate your monthly mortgage payment
How to save up for a down payment
If you've set homebuying as a medium- to long-term goal, there are financial products that can grow your money faster.
High-yield savings accounts (HYSAs) earn far more than traditional savings accounts, but the funds are more accessible than if they were tied up in a CD.
With you only need a dollar to open an account and there's no minimum balance requirement or monthly fees.
Western Alliance Bank High-Yield Savings Account
Annual Percentage Yield (APY)
4.25% APY
Minimum balance
$1 minimum deposit
Monthly fee
None
Maximum transactions
Up to 6 transactions each month
Excessive transactions fee
The bank may charge fees for non-sufficient funds
Overdraft fee
No overdraft fee
Offer checking account?
No
Offer ATM card?
No
Terms apply.
If you have a UFB Secure Savings account and UFB Freedom checking account, you can qualify for an additional 0.20% APY. You'll need to set up a monthly direct deposit of at least $5,000, maintain a minimum balance of $10,000 and make 10 debit card transactions per statement cycle.
Down payment FAQs
What is a down payment?
If you are financing the purchase of a home, your down payment is the portion you deliver up front. The remainder of the home price is covered by your mortgage.
What's a good down payment for a $500,000 house?
If you want to avoid mortgage insurance by putting 20% down, your down payment should be $100,000. If you plan to put 9% down (the median for first-time homebuyers) it would be $45,000. If you're a first-time homebuyer with an FHA loan and a 3% down requirement, you would need $15,000.
Are there down payment assistance programs?
Yes. Freddie Mac's DPA One guide lists more than 400 programs nationwide.
Do you need to put 20% down to buy a house?
No, many buyers put less down. Between June 2023 and June 2024, the median down payment for first-time homebuyers was 9%, according to NAR.
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