The amount you need for a down payment on a house varies depending on your financial situation, the type of loan, and the property, but here are the key points:
- 20% down payment is ideal because it helps you avoid private mortgage insurance (PMI), reduces your loan amount, and lowers monthly payments. However, it is not mandatory
- The average down payment for first-time buyers is between 8% and 13% , with typical first-time buyers putting down about 8% and repeat buyers around 19%
- Some loan programs allow for much smaller down payments:
- Conventional loans can require as little as 3% down if you meet certain criteria
* FHA loans require a minimum of **3.5% down** if your credit score is 580 or higher; otherwise, 10% down if credit score is lower
* VA and USDA loans often require **0% down** for eligible borrowers
* Jumbo loans usually require between **5% and 10% down** or more
- If you put down less than 20%, you will likely have to pay mortgage insurance, which increases your monthly costs
- The minimum down payment also depends on the home's purchase price. For example, in Canada, the minimum down payment is 5% for homes up to $500,000, 10% for the portion above $500,000 up to $1 million, and 20% for homes over $1 million
In summary, while 20% down is recommended to save on costs, you can buy a house with as little as 0-3% down depending on your loan type and qualifications. The best down payment amount depends on your financial situation, loan options, and local market conditions
