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You might have heard that you’ll need a 20 percent down payment to obtain a mortgage and buy a home. While it’s true that some properties might require a hefty chunk of change upfront, 20 percent is hardly the do-or-die requirement it once was. Many low- and no-down payment mortgages are available today, including conventional, FHA and VA loans.
Key takeaways
- The down payment on a home is a percentage of the property's price paid for in cash upfront. The remaining portion is paid via a mortgage.
- You can make a down payment using personal funds from savings or investments, gift money from family or friends or a second mortgage or grant.
- Conventional loans require a minimum down payment of 3 percent, while FHA loans require 3.5 percent. VA loans and USDA loans don't require a down payment. For a jumbo loan, you might need 10 percent, 20 percent or more.
2023 average down payment statistics
- The average down payment on a primary residence as of the first quarter of 2023 was 13 percent, according to Realtor.com.
- The median down payment as of the first quarter of 2023 was $26,250, according to ATTOM Data Solutions.
- The five housing markets with the highest median down payment as of the first quarter of 2023 were: San Jose-Sunnyvale-Santa Clara ($360,000); San Francisco-Oakland-Hayward ($239,750); Los Angeles-Long Beach-Anaheim ($174,000); Boulder ($171,135); and Santa Rosa, according to ATTOM.
Down payment requirements and assistance programs
Many of the most common mortgages are available with little or no money down for qualifying borrowers:
| Loan type | Minimum down payment |
|---|---|
| VA mortgage | 0 percent down |
| USDA mortgage | 0 percent down |
| FHA mortgage | 3.5 percent down with a credit score of 580 or more, or 10 percent with a credit score of 500 or more |
| Conventional (conforming) mortgage | 3 percent |
Almost every state and many municipalities also offer down payment assistance to first-time and low-income homebuyers. Some lenders have even begun allowing 1 percent down on conventional mortgages, offering a 2 percent grant to cover the difference.
Average down payment by state
There was a big spread in median down payments by state as of March 2022, according to Optimal Blue of mortgage data and technology firm Black Knight. In California, the median was over $100,000, while it was less than $10,000 in a handful of states.
Average down payment by generation
In general, the younger a buyer is, the more likely they are to make a smaller down payment.
| Age group | Median down payment percentage |
|---|---|
| Source: National Association of Realtors 2022 Home Buyers and Sellers Generational Trends Report | |
| All homebuyers | 14% |
| Homebuyers aged 23–31 | 8% |
| Homebuyers aged 32–41 | 11% |
| Homebuyers aged 42–56 | 10% |
| Homebuyers aged 57–66 | 20% |
| Homebuyers aged 67–75 | 21% |
| Homebuyers aged 76–96 | 27% |
Source of down payment
Forty-seven percent of homebuyers used personal savings for their down payment, according to the National Association of Realtors (NAR). Younger buyers were most likely to use savings, while older buyers were most likely to use the proceeds from the sale of another primary residence.
Other common ways to fund a down payment include selling stocks and bonds, or using a financial gift from relatives or friends, tax refund or inheritance.
Home value vs. down payment
Here’s a quick table to help you estimate your down payment based on how much you plan to lay out and the value of the property you’re purchasing:
| Purchase price | 3% down | 3.5% down | 10% down | 20% down |
|---|---|---|---|---|
| $200,000 | $6,000 | $7,000 | $20,000 | $40,000 |
| $300,000 | $9,000 | $10,500 | $30,000 | $60,000 |
| $400,000 | $12,000 | $14,000 | $40,000 | $80,000 |
| $500,000 | $15,000 | $17,500 | $50,000 | $100,000 |
| $600,000 | $18,000 | $21,000 | $60,000 | $120,000 |
| $700,000 | $21,000 | $24,500 | $70,000 | $140,000 |
| $800,000 | $24,000 | $28,000 | $80,000 | $160,000 |
| $900,000 | $27,000 | $31,500 | $90,000 | $180,000 |
| $1,000,000 | $30,000 | $35,000 | $100,000 | $200,000 |
Bottom line
For many renters, coming up with a down payment is one of the major obstacles to buying a home. The average down payment percentage overall is in the teens, but older buyers tend to put down more, often thanks to equity from a previous home. Another key factor in down payment amounts: where you buy. Homebuyers in higher-priced places like California need to have much more saved for a 3 percent down payment, for example, than buyers in less-expensive areas. Fortunately, you don’t need the oft-heard 20 percent to qualify for a mortgage. Learn more about mortgage down payment requirements.
