Home Credit score Here is the average down payment on a house in 2022

Here is the average down payment on a house in 2022


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Buying a home is probably one of the biggest purchases many Americans will make in their lifetime. But with the rising cost of housing, many are finding it increasingly difficult to save enough for the benchmark 20% down payment.

Luckily, there are still plenty of ways to buy the home you want without shelling out a large sum of money up front. Although there was a flurry of homebuyers buying homes with cash or a large down payment, it turns out that many Americans were betting much less than the usual 20% of the home’s value at advance – even in this difficult housing market.

Below, Select details the average down payment on a home these days, how you can tell if you have enough money to make a down payment, and the best ways to save for it.

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The average down payment on a home today

According a recent report from the National Association of Realtorsnearly half of consumers believe they should pay at least 16% of the home’s value or more for a down payment, while one in 10 believe they should pay more than 20%.

Fortunately, this is simply not the case. The report says the average down payment on a home in 2021 was just 7% for first-time home buyers and 17% for repeat buyers.

Among the many difficulties faced by potential buyers is the fact that for the past two years they have had to compete with cash buyers. The National Association of Realtors said in May 2022 that 25% of buyers had enough cash to buy a home without needing financing, essentially putting everyone else who hoped to buy at a disadvantage.

However, since the buying market has slowed significantly due to high interest rates, homebuyers in general now have a better chance of securing their dream home, no matter the size of their home. downpayment.

I bought my house in January 2022 with a conventional loan and a 5% down payment; I felt no setback after making a down payment of less than 20%. By paying a lower amount, I can continue to pay off other debts and invest for the future. That said, I’m still subject to the payment of private mortgage insurance, or PMI, which will eventually fall off my mortgage once I hit the 20% equity mark.

Select reviewed the best lenders for those looking to buy a home with a small down payment and ranked hunting bank as the best for flexible payment options, Allied bank as the best no-fee lenders, and Citi Mortgage as the best for no PMI.

hunting bank

  • Annual Percentage Rate (APR)

    Apply online for personalized rates; fixed and adjustable rate mortgages included

  • Types of loans

    Conventional Loans, FHA Loans, VA Loans, DreaMaker℠ Loans, and Jumbo Loans

  • Terms

  • Credit needed

  • Minimum deposit

    3% if you continue with a DreaMaker℠ loan

Allied bank

  • Annual Percentage Rate (APR)

    Apply online for personalized rates; fixed and adjustable rate mortgages included

  • Types of loans

    Conventional Loans, HomeReady Loan and Jumbo Loans

  • Terms

  • Credit needed

  • Minimum deposit

    3% if you continue with a HomeReady loan


  • The Ally HomeReady loan allows a down payment of just under 3%
  • Pre-approval in just three minutes
  • Submission of the application in less than 15 minutes
  • Online support available
  • Existing Ally customers are eligible for a discount that applies to closing costs
  • Does not charge lender fees

The inconvenients

  • Does not offer FHA, USDA, VA or HELOCs loans
  • Mortgages are not available in Hawaii, Nevada, New Hampshire or New York


  • Annual Percentage Rate (APR)

    Ask online for personalized rates

  • Types of loans

    Conventional Loans, FHA Loans, VA Loans, and Jumbo Loans

  • Terms

  • Credit needed

  • Minimum deposit


  • Citi’s HomeRun Mortgage program allows for a down payment as low as 3%
  • Citi’s Lender Assistance Program offers eligible homebuyers a credit of up to $5,000 to use for closing costs
  • Ability to choose between fixed rate and adjustable rate mortgages
  • New and existing Citi Bank customers are eligible for closing fee discounts based on their account balance
  • HomeRun Mortgage Program Allows Less Than 20% Down Payment Without PMI
  • Provides training and advice on home ownership

The inconvenients

  • No option for 0% down payment
  • Existing customers need high account balances to qualify for some of the highest interest rate reductions

How to know if you have enough money to buy a house

Regardless of the size of the down payment, there are many other costs that come with home ownership, including monthly mortgage payments, property taxes, and maintenance, among others. Before you make an offer on a home, there are a few financial benchmarks you might want to hit first.

The key metric to keep in mind, however, is that your monthly mortgage payment should always be less than 30% of your gross monthly income.

For example, if you wanted to buy a $400,000 house and put down $20,000 for your down payment, you should plan to set aside an additional $12,000 to $24,000 to cover the closing process. Assuming a 30-year fixed rate mortgage and an interest rate of 4.5%, your monthly mortgage payment with PMI will end up being around $2,400 – you would need to earn $8,000 a month in gross income to comfortably afford it.

Unfortunately, many Americans currently find themselves in a home that is simply too expensive and stretches their budget too much. This term is commonly referred to as “poor housing”, and a recent study by consumer affairs indicates that 69% of owners feel the same way.

The best way to avoid this is to check the numbers before you buy and make sure you can meet the above criteria to live comfortably in your new home.

How to Save Enough for a Down Payment on a Home

Although the process of saving for the purchase of a home can seem quite daunting, there are many ways to get started.

Create a budget

Once you break down your monthly income and expenses, you can determine how much you can set aside each month to pay for your future home.

Open a High Yield Savings Account

These accounts are designed for consumers looking to put money aside, either as an emergency fund or towards a long-term goal like buying a home. Some of our favorite high yield savings accounts include the American Express®* High Yield Savings Account and the Ally Bank Online Savings Account.

Increase your income

Saving is the first step, but there are only a few things you can reduce. If saving alone isn’t enough, maybe it’s time to consider asking for a raise at work or taking a side job – the side job that helped me save enough money for a house was l independent writing.

As your savings prepare in other ways

Simply having the down payment is not enough. While you’re saving, do your best to maximize your credit score, start researching where you want to buy and how much space you can reasonably afford. That way, once you find the home you want and buy it, you won’t end up with an investment you can’t afford.

At the end of the line

Home purchases can be quite expensive once all costs are taken into account. That said, having to pay 20% deposit as a hard and fast rule is nothing more than a fable at this point.

In fact, you might want to consider using as little as possible. Yes, your monthly mortgage payment will be higher, but you may find it beneficial to have a low-interest mortgage and continue to invest your money elsewhere – in the stock market or other real estate ventures – waiting.

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*National Bank American Express is a member of the FDIC

Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.