A Comparison of the US Against the UK Average Down Payment

Given the United States average down payment of 2.9% compared to the United Kingdom 17%, it's no wonder most home buyers in the United Kingdom are putting their home on purchase compared to those in the United States.

last updated Wednesday, May 17, 2023
#Average Down Payment #Credit score

John Burson     Subscribe
A Comparison of the US Against the UK Average Down Payment


The US has the backing of the government FHA loans that require a down payment of 2.9 percent, and this is almost equivalent to 100% financing. Given such a small down payment figure, homeowners do not commit whatsoever.

Even with stringent measures put in place for the qualification of such loans, it's yet to be seen whether these loans would help those dying to apply. To get your hands on these loans, you should have a credit score of at least 580, which is no different from the loans made before the crisis. The FHA loans back in 2008 didn't state any negative amortization or income loans, and we wonder why the qualification is more stringent now than ever. The irony is that the United States government is pushing the agenda to make homeownership a right but still making it difficult for homeowners to access such loans.

Europe has no agenda to make people believe that homeownership is their right, but still, mortgage lenders require higher down payment and credit scores. They understand that the odds favor those with good credit scores who can afford a down payment. While others might consider the FHA loans as a way to get out of poverty, there isn't any monetary commitment for those will low credit scores to rise from poverty. Also, without financial burdens for those with low credit scores, it's difficult to picture what will happen when home prices collapse.


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