Average Down Payments on 30-Year Fixed Rate Mortgages Increase in Q4 2014, Data Shows

A new report from LendingTree shows that down payments continued to increase on 30-year fixed-rate purchase mortgages, with the figure ticking up year-over-year from the December 2013 quarter to the December 2014 quarter.

According to LendingTree, consumers paid an average of $47,585 on their 30-year fixed mortgages in the December ending quarter of 2014, or 17.59 percent of the value of their loan. This was an increase from a down payment of $45,545.32 and a percentage of 16.01 percent in the fourth calendar quarter of 2013. LendingTree attributed this to several factors, including improvements in the job market, soaring home prices, and low mortgage rates.

Down Payment

“It’s encouraging to see responsible borrowing behavior,” commented LendingTree founder and Chief Executive Douglas Lebda. “A substantial down payment will allow borrowers to build home equity, ease lender risk, avoid paying PMI and reduce monthly mortgage payments, all of which will help to further strengthen the overall economy.”

LendingTree also published a very helpful infographic ranking each of the 50 states and the District of Columbia based on which states’ consumers pay the lowest average down payment share, and which states’ consumers pay the lowest down payment. Looking at the top ten states based on average down payment amount, consumers in South Dakota paid only $27,825.98 down payment on average, or 15.83 percent of their mortgage’s value; there were also other states, such as North Dakota ($30,869.36) and Oklahoma ($30,991.43) where the average down payment was just a shade over the $30,000 mark.

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Talking about the average share of down payment, Arkansas had the lowest share at only 14.70 percent of a mortgage’s value, followed by North Dakota (15.09 percent), Indiana (15.18 percent), Missouri (15.55 percent), Ohio (15.62 percent), Alabama (15.63 percent), Oklahoma (15.64 percent), Vermont (15.68 percent), South Dakota (15.83 percent), and Kansas (15.83 percent). Not surprisingly, these states are mostly located in mid-America or, in Alabama’s case, the Southeast. And it was not surprising either that the states with the highest share of down payment were states with traditionally premium housing prices.

The District of Columbia had the highest average share of down payment on LendingTree’s infographic, with consumers in D.C. paying an average of 20.26 percent down on their mortgages. D.C. was followed by New York (20.02 percent), California (19.83 percent), Hawaii (19.70 percent), New Jersey (19.33 percent), Washington (19.22 percent), Massachusetts (18.98 percent), Florida (18.21 percent), Connecticut (18.13 percent), and Nevada (17.95 percent).

Moving on to individual metropolitan markets, California took up three of the top three spots in terms of average down payment amount – San Jose ($103,814.97), San Francisco ($101,952.70), and San Diego ($90,200.16). Seattle was fourth place with an average down payment of $84,295.98, while consumers in Bridgeport, Conn. paid an average of $82,817.65 down, ranking fifth place in this metric. It is also worth noting that for all five metros in the top five, the percentage of down payment relative to the home’s value was above 20 percent in all cases, with San Jose having a sizable 23 percent share.

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