New! Eligible SoFi members can invest in upcoming IPOs before they’re traded on the public market—only in the SoFi app.* Learn more

What Is the Average Down Payment on a House?

August 15, 2019 · 5 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

What Is the Average Down Payment on a House?

Coming up with a down payment can be one of the toughest parts of becoming a homeowner. Saving that much money while you’re already paying rent, making car payments, and covering other bills can be a struggle—even for those who are earning a good salary or who have two incomes to put together for a household. Utilizing a home affordability calculator can be a good starting point in understanding how much you will need to put down and other expenses related to the home buying process.

As if the whole thing weren’t daunting enough, there’s still a generally accepted belief among buyers that they must put down 20% of a home’s value to get a mortgage.

You may have heard that 20% is the benchmark for a solid down payment—and that’s true. But it doesn’t make that number a must—or the norm. Some lenders will allow a qualified borrower to make a down payment as low as zero or 1% . With a credit score of at least 580, an FHA borrower can get a loan with a 3.5% down payment.

So, how much is an average down payment on a house? It varies, depending on things like, the type of buyer, loan program, location, and prices in a specific area. For example, first-time buyers programs usually require less money down than repeat buyers, who can often use the proceeds from a home sale to make a down payment on their next home.

According to Zillow’s 2018 Consumer Housing Trends Report, more than half of the buyers surveyed (52%) put less than 20% down. And younger buyers put down less than older buyers: 60% of Millennials put down less than 20% compared with 48% of Gen Xers, 43% of baby boomers, and 38% of Silent Generation buyers.

First-time buyers who financed their home typically put down 7%, according to the National Association of Realtors’ 2018 profile of Home Buyers and Sellers, while repeat buyers put down 16%.

Should You Aim for 20%?

So, the question isn’t necessarily whether you have to put 20% down to get a mortgage, it’s whether you should. Here are some things to consider:

If your down payment is 20%

If you can come up with enough to put down 20%, it could save you money on the total cost of the home mortgage.

Your loan terms may be better: When lenders are deciding whether to approve a mortgage and what the terms should be, they may look at several factors, including credit history, employment stability, income, debt to income ratio, and savings. They’ll also likely calculate the loan-to-value ratio, or what percentage of the home’s purchase price will be covered by the mortgage loan.

Mortgage lenders often provide better loan terms to borrowers who have loan-to-value ratios no higher than 80%, because they consider them to be a better risk. The fact that the buyers are putting more money toward the home is considered a sign of commitment.

You might not have to pay for mortgage insurance: If you put down 20% or more on a home with a conventional loan, you won’t be required to pay for private mortgage insurance (PMI), which is insurance that protects the lender’s interest in the loan if you stop making payments.

The cost of PMI is based on things like the loan amount, the borrower’s creditworthiness, and the percentage of a home’s value that would be paid out for a claim. Rates vary but generally range from 0.55% to 2.25% of the original loan amount—or $550 to $2,250 for every $100,000 borrowed.

That’s a lot of money you can leave off your house payment every month. (The FHA requires both upfront and annual mortgage insurance premiums (MIP ) for all borrowers, regardless of the amount of down payment.)
You could leave yourself short of money: If you’re feeling squeezed by the effort to save for a house, you may want to reconsider your timeline or the amount you’ll put down.

Potential mortgage lenders will likely want to look at your bank statements to see how much money you have, how long you’ve had it, and how you manage it. And once you’re making payments, you don’t want to fall behind on your mortgage (or any other bills) because you’ve run out of savings or have had to tap your emergency fund.

SoFi offers different multiple types of
mortgages so you can choose the
terms that suit you best.

If your down payment is less than 20%

There isn’t anything wrong with making a down payment that’s less than 20%—as noted above, most people do.

You can cancel the PMI later on: Under the Homeowners Protection Act , lenders are required to automatically cancel PMI when the loan balance gets to 78% LTV of the original value of the home. You also can ask your lender to cancel the PMI once you’ve paid down your loan to 80% of the home’s original value depending upon eligibility. Or, if the value of the home has increased, you may owe less than 80% of what it’s worth, which could qualify you to apply for cancellation of PMI on that mortgage.

You may be able to improve your loan terms if you have a good credit rating: If you can’t pull together 20% for a down payment, you can still help yourself by showing lenders that you’re a good risk. If you have a good job, a solid credit rating, and other positive factors, you may still qualify for a manageable interest rate or better terms.

You may want to take advantage of a good deal: Mortgage interest rates are lower than forecasters expected right now, and those savings could be an important factor in whether you leap or keep looking at homes until you have a bigger down payment. There are also predictions that we could be moving from a seller’s market to a buyer’s market.

If you find the home you want at the right price, you may want to crunch the numbers to see if it’s worth moving forward with a lower down payment. Keep in mind, though, that if you finance a higher amount, no matter how favorable the terms are that you negotiate, your payments will likely be higher.

Ways to Save

As you work your way toward that down payment—big or small—here are a few changes that could help you get there:

Figuring out how much you’ll need: Setting a goal can be a sound step toward making it a reality. A mortgage calculator can help you estimate how much you can borrow, play with different down payment options, and view different monthly mortgage payment options (how much your monthly mortgage payments will be).

Creating a realistic monthly budget: Paying down debt and budgeting for your monthly expenses could help put more toward your down payment and, later, make your payments on time when you get your home loan.

Reducing unnecessary costs: Think about expenses that could be eliminated temporarily (or forever) and start putting that money into your down payment savings account. Could you press pause on your premium cable channels, dinner out once a week, or your clothing subscription box? Every little bit can help.

Finding the right place to stash your down payment savings: If you haven’t already done so, you may want to open an online savings account to handle your down payment savings.

Making savings automatic: You may have the best intentions to save each month, but something is always bound to come up. Setting up an automatic plan can take away some of temptation and put savings on autopilot.

What SoFi Has to Offer

When you’re ready to move forward in your home buying journey, SoFi can help there, too. With a SoFi mortgage loan, you’ll find competitive rates and no hidden fees. You can put as little as 10% down, and you don’t have to worry about paying for PMI on our Jumbo loan programs.

And SoFi offers several different types of mortgages, so you can choose the terms that suit you best.
Got the home-buying bug? Find out what a SoFi mortgage could mean for you.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see

SoFi Home Loans
Terms, conditions, and state restrictions apply. SoFi Home Loans are not available in all states. See for more information.

SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank. SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.
SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.


All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store
SoFi Android App, Get it on Google Play

TLS 1.2 Encrypted
Equal Housing Lender