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Average Down Payment On A House For A First-Time Buyer: What To Expect + Statistics

Miranda Crace5-minute read
UPDATED: March 28, 2023

A first-time buyer's average down payment on a house is 6%.1 A first-time home buyer purchasing a $400,000 house can expect to pay $24,000 for a 6% down payment.

If this percentage sounds low to you, that’s likely because of the 20% down mortgage myth. This myth of a 20% rule was spurred by lending requirements stating borrowers with down payments below 20% must obtain mortgage insurance.

Not all buyers make the average down payment. In reality, it’s possible to purchase a home with as little as 3% down, or in some cases, no money down at all. While making a down payment lower than 20% can make homeownership more attainable, the lender will require mortgage insurance to protect their funds if the borrower fails to make payments.

Average Down Payments For First Time Buyers In The U.S. : Average U.S. home cost $440,300, Average down payment estimated for first-time home buyers $26,418 Source: Federal Reserve

First-time buyers now represent over a half of all mortgage loans.3 Home values differ drastically state by state, so the down payment you can expect to make will depend on the region where you’re buying a home. Generally, locations with a higher cost of living will have more expensive homes, which means a higher down payment.

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How To Lower Your Down Payment As A First-Time Buyer

While it’s often recommended to put as close to 20% down as possible, there are several options on the table if you’re unable or unwilling to make a larger down payment.

Alternative Down Payment Options For First-Time Home Buyers: No Money Down, Little Money Down, Payment Assistance

Choose A Loan With Little Or No Down Payment Requirement

Not all mortgage loans are created equal. The mortgage loan you apply for could determine how sizeable your down payment should be:

  • Conventional loans offer down payments as low as 3% depending on factors like your credit score and history.
  • FHA loans are backed by the government and require as little as 3.5% down, depending on your credit score.
  • USDA loans are available to low- and moderate-income families in qualifying rural and suburban areas. They typically require little to no money down.
  • VA loans are available to veterans and their families, as well as active duty service members. They typically require no money down if you qualify.

Look For A Payment Assistance Program

Your state or local government might offer a variety of down payment assistance programs geared toward helping home buyers. Some states offer specific first-time home buyer programs, too. These typically include: 

  • Grants: This is the most valuable form of down payment assistance available because it doesn’t require repayment (though it could create a second lien on your home in some cases).
  • Forgivable loans: These 0% interest loans don’t require repayment as long as you stay in your home for a specified number of years. You could have to pay back all or a portion of the loan if you move sooner.
  • Deferred-payment loans: These 0% interest loans don’t require repayment until you move, sell, refinance your mortgage or pay down your loan. They are not forgivable.
  • Low-interest loans: You may have the option to take out a second mortgage loan when your first mortgage is finalized. This can be used to pay your down payment, but you’ll have to make two mortgage payments each month.
  • Matched savings program: Also called individual development accounts, these programs line up banks, government agencies or community organizations to match borrower deposits up to a certain amount, which you can use toward your down payment.

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First-Time Home Buyer Mortgage Statistics

First-time home buyers have a number of purchasing trends and opportunities that differ from a repeat home buyer’s experience. Check out these additional statistics to better understand what your home buying experience may look like.

  • 51% of new mortgage loans were awarded to first-time buyers in 2021.3
  • First-time home buyers pay $13,437 in their first year of mortgage payments.9
  • The median credit score of first-time buyers was 746 in 2022, compared to 754 for general buyers.9
  • First-time home buyers largely prefer government sponsored enterprise (GSE) loans backed by Fannie Mae and Freddie Mac over private loans. Here’s how buyers varied by loan type in 2018:4
    • GSE: 44%
    • FHA: 27%
    • Private: 15%
    • VA: 9%
    • USDA: 5%
  • The median age of a first-time home buyer in 2021 was 33 years old.5
  • Freddie Mac mortgages for first-time home buyers reached all-time highs with 554,000 loans financed in 2021.6
  • More first-time buyers rely on co-borrowers, with 3.5% co-signing with a person 55 years of age or older in 2022 – a 40% increase from 2020.7

First-Time Home Buyer Down Payment FAQs

Here are some frequently asked questions about average first-time home buyer down payments and the home buying process in general.

What Is A Good Down Payment On A House For A First-Time Home Buyer?

There’s no one-size-fits-all solution when it comes to buying a home. Similarly, your down payment will depend on factors unique to you, like your credit score or your savings cushion.

It’s often a good idea to put 20% down if you want to avoid mortgage insurance, as long as you’re comfortably able to do it without depleting your savings. However, even putting down just 3% can help you start building equity in your new home.

What Other Costs Should First-Time Home Buyers Consider?

Though a down payment is usually the biggest out-of-pocket expense first-time home buyers can expect to pay, there are other costs to plan for, like:

  • Closing costs to process your mortgage (including origination, title and appraisal fees), approximately 3% – 6% of the home’s purchase price
  • Cash reserves to satisfy lending requirements (if applicable), typically up to 6 months of mortgage payments
  • Miscellaneous moving costs including any new furnishings or necessary repairs

Is A 20% Down Payment Required?

There is no legal requirement to make a 20% down payment on a house. Many options are available for buyers seeking lower or nonexistent down payments.

Buyers who put less than 20% down will be required to purchase mortgage insurance as a form of protection for the lender. This insurance is no longer required once borrowers reach 20% equity in their home.

How Can I Get Down Payment Assistance As A First-Time Home Buyer?

Every state has its own down payment assistance program via that state’s housing finance agency. Some states also offer programs specifically for first-time home buyers.

In addition to state programs, the Federal Housing Authority offers privately funded down payment grants across the nation.

The Lowdown On Down Payments

A larger down payment has its benefits, but it’s not an option for all home buyers, nor is it a rule in the home buying process. Your unique circumstances like the type of loan, your credit score and your savings cushion could determine whether you qualify for a lower down payment or are able to avoid a down payment entirely.

Your down payment isn’t a penalty or a fee, but rather the first bit of equity you’ll put into your new home. When you’re ready to get started, get approved with Rocket Mortgage® to identify the best loan options for your budget.


1. Rocket Mortgage

2. Census – MHS Annual Data


4. Consumer Financial Protection Bureau

5. NAR

6. Freddie Mac – First-Time Homebuyers Are Driving The Market Forward

7. Freddie Mac – Co-Borrowing Is On The Rise

8. Census – New Residential Sales

9. Fannie Mae

10. Federal Reserve

Miranda Crace

Miranda Crace is a Senior Section Editor for the Rocket Companies, bringing a wealth of knowledge about mortgages, personal finance, real estate, and personal loans for over 10 years.