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Buying your first home is an exciting milestone, but saving up for the down payment can feel daunting. As a first time buyer, how much deposit do you really need to purchase a house or condo? The answer might pleasantly surprise you.
What Is a Down Payment?
A down payment is the amount of money you pay upfront when buying a home, usually calculated as a percentage of the total purchase price The remainder of the price is covered by a mortgage loan
For example if you buy a $300000 home and make a 10% down payment, you would pay $30,000 upfront and finance the remaining $270,000 with a mortgage.
Average First Time Buyer Down Payment
The average down payment for first time home buyers is only 6-8% according to data from the National Association of Realtors
So for a $300,000 home purchase, a typical first time buyer down payment would be:
- 6% down = $18,000
- 8% down = $24,000
This is much less than the traditional 20% down payment advice. With today’s loan programs, most first timers can buy with under 10% down.
Minimum Down Payment Required
The minimum down payment depends on the mortgage loan type:
- FHA loans – 3.5% down payment for scores 580+
- VA loans – 0% down payment for veterans
- USDA loans – 0% down in eligible rural areas
- Conventional loans – 3-5% down payment typically
So for that $300,000 home, minimum first time buyer down payments would be:
- FHA loan: 3.5% down = $10,500
- VA loan: 0% down = $0
- USDA loan: 0% down = $0
- Conventional: 3% down = $9,000
As you can see, 0% down mortgages allow qualified buyers to become homeowners without a down payment. Most people will make at least a small 3-5% payment, but it’s far less than 20% down.
How Much Should You Put Down?
As a first time buyer, how much you put down depends on factors like:
- Your current savings
- The purchase price
- Your income and debts
- Your credit score
- Down payment assistance programs in your area
A larger down payment reduces your loan amount, lowers monthly payments, and avoids mortgage insurance (with 20% down). But a smaller down payment gets you into a home sooner and keeps more cash free for other costs.
Run the numbers for different down payment scenarios to see the tradeoffs. There’s no one-size-fits-all answer.
Down Payment Assistance Programs
If saving up 3-5% still feels difficult, look into down payment assistance (DPA) in your state. DPA programs offer grants, low interest loans, or deferred second mortgages to cover all or part of the down payment and closing costs.
Over 2,500 programs nationwide provide first time home buyer down payment help, making ownership more affordable. Reach out to local housing organizations to find options.
First Time Buyer Down Payment FAQ
How much deposit does a first time buyer need UK?
In the UK, first time buyers typically put down a 5-10% deposit. Popular mortgage deals like Help to Buy allow 5% down.
Can you buy a house with no down payment?
Yes, 0% down mortgages are available through VA and USDA loans if you meet eligibility requirements. Most buyers make a small down payment.
What is the minimum down payment for a $300,000 house?
For a $300,000 home, you can put as little as 3.5% down with an FHA loan, equaling a $10,500 minimum down payment. Conventional and other loans often start at 3% down.
Does down payment lower monthly payments?
Yes, a larger down payment reduces the loan amount, which lowers your principal/interest payments. But the difference may be less than you think.
First Time Buyers Can Buy with Less Down
Don’t let down payment costs deter you from buying your first home. Today’s mortgages allow qualified buyers to purchase with as little as 3-5% down – far less than the outdated 20% rule.
Do your homework on loan options, down payment assistance programs, and whether a smaller or larger down payment fits your situation better. You may be pleasantly surprised at how affordable buying your first home can be.
5 years The amount of time that nearly one-third of aspiring homeowners (30 percent) say it will take to save enough to buy a home.
Source: Bankrate 2024 Down Payment survey
9% The median down payment for first-time homebuyers in 202
Source: National Association of Realtors
The median down payment for a first-time homebuyer was 9 percent in 2024, according to the National Association of Realtors (NAR). For a $400,000 home, a 9 percent down payment totals $36,000.
Compare that to repeat buyers, whose typical down payment in 2024 was 23 percent, or $92,000 on a $400,000 home. Thirty-two percent of first-time buyers reported to NAR that saving for the down payment was the most difficult part of buying a home.