How Much Is an Average Down Payment on a House?

According to a recent survey, the average down payment for a home was between $10,000 and $15,000, or about 5 percent-6 percent of the total purchase price for a typical US home, according to thelendersnetwork.com. Only a few decades ago, it wasn’t uncommon for homebuyers to put 20 percent down, and more. Even if the average home down payment today seems like a lot to gather, it’s a fraction of what it once was.


Your down payment is the amount of money that you place upfront on the purchase of a home, from your savings. It will help to pay down the total amount of the purchase price and these funds will be used with the loan to make the purchase at closing.

With average housing prices in US metropolitan areas hovering around $250,000, the usual down payment on a house for a conventional 30-year fixed mortgage is around $12,500. That’s equivalent to 5 percent of the total purchase price. There are benefits to paying more than the down payment average. We’re going to review some key ways your down payment can help you secure the home of your dreams.

Is a Typical Down Payment 20 Percent?

In the past, the average mortgage down payment used to be much higher — at or above 20 percent.

With average mortgage down payments being significantly lower than those seen historically, the opportunity of homeownership has opened to many who may not have been able to afford it previously. However, it’s important to note that private mortgage insurance (PMI) is usually required on homes where less than 20 percent is deposited, so you should be aware of what PMI can do to your monthly payment if you decide to put down less than 20 percent. While putting down less than 20 percent of the purchase price makes it easier to buy a home, that decrease in upfront expense can translate into a higher monthly amount due.

Most importantly, lenders tend to view PMI-required loans as a riskier venture. But they’re not a deal breaker by any means. You’ll pay a bit more, but if you’re qualified, you’ll get the loan. And conversely, there are loan programs out there where the cost of a down payment on a house is no money down — at all. These “zero down” mortgages aren’t a typical home down payment, but they are possible under certain circumstances, depending on the loan type.

How Much Is a Typical Down Payment on a House?

Lenders and underwriters will usually offer more competitive interest rates when your loan-to-value ratio is low. In other words when you’ve invested in a home with a larger down payment, lenders will release the mortgage insurance requirement. And with these larger-than-average down payments, you may be able to leverage a big financial benefit. Take a look at this chart that compares the home’s overall price to the down payment, PMI interest rates and cost implications:

Home Price
Down Payment
PMI — 0.5%
$150,000
3.5% or $5,250
$61/mo or $5,851 total
$150,000
20% or $30,000
Not required
$250,000
3.5% or $8,750
$101/mo or $9,751 total
$250,000
20% or $50,000
Not required

When Is the Down Payment Due?

A portion of the down payment is due very soon after the seller agrees to your offer. It’s broken down into two sections: The earnest money and the remainder of that balance.

Your earnest money deposit (otherwise known as a good faith deposit) is due within three business days of a signed and accepted offer to purchase. This money will be deposited into a trust or escrow and will be paid out at closing. The balance of your down payment is due right before closing, when ownership of the property officially changes hands.

Does My 20 Percent Down Payment Cover Closing Costs?

There’s a big difference between your down payment and your closing costs. Closing costs typically cover the payment of fees, taxes and other monies due at closing. So, are closing costs included in your 20 percent down payment? The short answer: not usually. Sometimes, the buyer will request that the seller agree to a higher purchase price so that those extra funds can be applied to closing costs. You’ll be responsible for covering these closing costs unless you and the seller specifically define the terms otherwise in your purchase agreement.

Understanding just how much your new home will cost you really depends on the financial choices you make and the way you negotiate your deal. But with a little homework and a lot of determination, you can land the home you’ve always wanted at a price that works for you. While you’re considering your down payment options, remember to check in with your American Family Insurance agent. They’re able to customize a policy that fits your budget and the exact needs of your home.


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