The National Association of REALTORS® 2024 Profile of Home Buyers and Sellers report revealed that the median down payment is 18%. Not surprisingly, first-time homebuyers tend to make smaller down payments — 9%, according to the NAR report, compared to 23% for repeat buyers.
What makes a “typical” down payment also varies by location.
In Richmond, Virginia, for example, down payments generally range from 5% to 20%, averaging about 7% overall, according to Scott Waters, a REALTOR with Real Broker LLC.
Colorado buyers are putting down slightly more. Brett Johnson, a Colorado real estate agent, investor, and owner of New Era Home Buyers, says down payments there range from 10% to 20%. Buyers purchasing higher end properties might even put down more than 20%, he says.
Buyers in Florida are putting just 5% to 10% down, says Jeff Lichtenstein, CEO and broker of Echo Fine Properties, based in Jupiter, Florida.
The average down payment varies depending on the type of loan you apply for, where you’re buying, and what your long-term goals are. Here’s how down payments work and what you can expect to spend if you’re buying a home.
Factors affecting the size of down payments
Two primary factors affect the size of down payments:
Loan type
The first factor is the type of mortgage loan you use and its requirements. Each loan type has a maximum loan-to-value ratio (LTV) that determines how much of the purchase price you’re allowed to finance. You can finance with no money down using a 100% LTV loan, for example, but you’ll need at least 5% down if the maximum LTV is 95%.
Your financial situation
The second factor is your financial situation, which determines how much you’re able to put down. Repeat buyers often have equity they can put toward the purchase of a new home, but most first-time buyers rely primarily on savings. A smaller number borrow from family and friends, use gift money, tap into their financial assets, or use inherited money for their down payments, NAR reported.
Comparing down payment requirements across different loan types
Down payment requirements differ from one type of loan to the next. The following table provides an at-a-glance comparison of the amount you’ll need for the most common loan types:
How much should you put down on your first home?
How much to put down is a personal choice, and it’s one you should discuss with your real estate agent and mortgage loan officer.
“My motto is 'mortgages are not a one-size-fits-all,'" says Brian Shahwan, vice president, mortgage banker and broker at William Raveis Mortgage. “Your overall goals will determine the best way to structure your loan.”
Define your goals
Is it important to you to have money left over that you can save, invest, or use for other expenses? If so, a smaller down payment might work best for you.
If, on the other hand, you’d rather have a smaller loan payment and lower loan costs, a larger down payment might be the better choice.
“Putting more money down upfront ... reduces the loan amount, which directly translates to lower monthly payments and less interest paid over the loan's life,” says Reilly Renwick, chief marketing officer at Pragmatic Mortgage Lending.
For example:
Say you want to buy a $250,000 home with a 6.75% interest rate and 30-year term. A 20% down payment would be $50,000 while 5% would be $12,500. The smaller down payment means a larger loan for you to repay — and over $50,000 more paid in interest.
Factor in market conditions
In some markets, the down payment amount can make or break the sale. That’s because sellers sometimes interpret it as a sign of the buyer’s financial strength and their likelihood of being approved for financing.
“I have carried up to 60 listings at a time,” Lichtenstein says. “I don’t want my seller to move out of the house and then see the client not close with next to nothing to show for it.”
When working with buyers using loans that allow 3.5% or 5% down, Lichtenstein recommends that they increase their down payments to closer to 10%.
“If we are bidding against someone else, more down wins the deal, " he says.
Johnson sees similar situations in Colorado.
“From my experience, particularly in competitive markets like Denver, I’ve seen sellers favor offers with a substantial down payment even if the purchase price is slightly lower, simply for the added confidence,” Johnson says.
Consider other cash needs
Your down payment might be the biggest cash expense in your purchase, but it won’t be the only one.
“It is also important to realize that [you’ll] need to account for closing costs and reserve funds in addition to the down-payment,” Shahwan says.
Renwick warned that having little or no cash left for reserves is a sign that the home price is more than you can afford.
“We'd recommend saving more or considering a less expensive home for a better financial cushion, balancing loan size and a solid safety net,” he said.
Expert tip:
“Expect closing costs to range from 2% to 5% of your home price. Some lenders let you roll closing costs into the mortgage instead of paying them upfront, but that increases your loan amount.” — Valerie Morris, Editor, Mortgages
Tips for saving for a down payment
Saving up for a down payment is one of the most challenging aspects of buying a home.
Shirley Mueller, owner and CEO of VA Loans Texas, says if you find yourself short of your down payment goal, the first step is to assess your financial picture and identify immediate resources.
“When clients come to me with a $30,000 gap, I encourage them to evaluate all potential avenues, such as gifts from family, employer assistance programs, or even tapping into retirement savings if allowed and strategically feasible.
“For example, I recently worked with a couple who leveraged their 401(k) through a low-interest loan, combined it with their savings, and were able to secure their dream home without jeopardizing their long-term financial stability,” Mueller adds. “This initial assessment helps clarify what's realistically attainable and sets the stage for a focused savings strategy.
Dana Mirana, Certified Educator in Personal Finance® and creator and author at Healthy Rich, suggested also assessing your financial obligations to create a complete “money map.”
Mirana, author of “You Don’t Need a Budget,” offered these tips for saving money:
- A money map will help you see where you could make changes to prioritize buying a house. You might need to temporarily find more income, adjust your monthly expenses, tweak your day-to-day spending, or deprioritize other goals, like paying down debt, to free up money for a down payment.
- Look into programs that offer down payment assistance. State, federal, and nonprofit programs offer down payment loans or grants for low-income first-time homebuyers to help overcome the barrier of a down payment. Even if you have some savings, it's worth finding out whether you qualify so you can hold onto that savings for unexpected home repairs in the future.
- If you're trying to free up money, look at your biggest expenses first, rather than trying to count pennies on day-to-day spending. Could you rent a smaller home or move to a cheaper neighborhood for a year to redirect funds toward your down payment? Could you sell your car and use public transportation, or avoid upgrading once the loan is paid off? Could you enroll in income-driven repayment to reduce your student loan expense?
If your progress seems slow, remember this advice from Alex Shekhtman, a mortgage executive, CEO, and founder of LBC Mortgage.
“Buying a home isn't just a financial transaction — it's the start of a new chapter in your life. Every dollar you save now is a brick in the foundation of that dream,” Shekhtman says. “So, think of each choice you make as an investment in your future self. Stick to the plan, and that front door key will feel all the sweeter."
Average down payment on a house FAQ
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