What is the optimal Seattle home loan down payment for you to make on your next house?

There are a lot of harmful myths about down payments and buying a home in Seattle. Yet, it is one of the most important factors when it comes to making the decision to buy your own place, or next place. 

So, how much down payment do you really need? What are the real pros and cons of putting down a little or a lot? What is the optimal number for you on your transaction?

How Much Down Payment Do I Need For A Home In Seattle?

Uncertainty around how much down payment you need to buy a house in Seattle, Washington is often one of the most common factors that hold potential homeowners back. Specifically, many have long been told they need a really big down payment, which has kept them captive as renters when they don’t need to be. 

It is often believed that you must have a 20% down payment to even consider going house shopping. With an average home price in Seattle of around $840,000, that’s quite a big number for many would be home buyers. That would be $168,000, not counting any other closing costs or moving costs. 

Fortunately, you don’t have to have 20% to put down in most cases. That is a myth. There can be some benefits to going that big. Though there can also be benefits of making a smaller down payment as we’ll uncover in a moment. 

Low Down Payment Loan Programs In Seattle, WA

There are actually still quite a few low down payment mortgage options for Seattle home buyers.

These still range from zero down payment, 100% financing options, to being able to put down 3.5% of the purchase price.

These loan programs can still come with some great interest rates and loan features, and don’t have to be as hard to get as you might have been led to believe. 

These low down payment home mortgage programs include:

  • FHA loans
  • VA home mortgages
  • USDA loans
  • Low down conventional mortgage loans

Additionally, there are a variety of down payment assistance programs that can provide extra funds to help with your down payment and closing costs.  

The Benefits Of Making A Smaller Down Payment

How can making a smaller down payment actually be better for you?

Less Risk

If you are still nervous about the decision to buy a home or the market, a low down payment mortgage makes it a lot less risky. With 100% financing, or even 97% financing, you really aren’t risking a lot at all. Probably less than the cost of moving to a new rental apartment.

Being Able To Buy Earlier

Every year those who waited to buy a home are kicking themselves. Home values have typically gone up again, making buying further out of reach, while they missed out on making a lot of money again. 

Even amidst the COVID lockdown year Seattle home prices went up by almost 9%. So, if you didn’t buy, you missed out on a free $$75,600. It also means you will now have to pay around another $80,000 for the same house. Including having to come up with more down payment.

Most people cannot save faster than property prices are rising. It is better to buy now, and enjoy the appreciation when it is there. Even if you can’t get into your dream house today, this appreciation will help make that possible. You can use that money to make a larger down payment on your next home. 

Keep Cash On Hand

Making a lower down payment means being able to keep cash on hand for emergencies and unexpected expenses.

The Potential Benefits Of Making A Larger Down Payment

There can be potential advantages of making a larger down payment as well. Here are some of them.

Lower Monthly Payments

If you finance less, then your ongoing monthly payments will be lower too. It’s always good to have some extra cushion in your finances, and not be stretched to the limit every month.

Lower APR

Seattle mortgage lenders will also often reward you making a bigger down payment with a lower interest rate and fewer points as well. So, your financing costs will be lower over the life of your loan. That will further decrease your monthly payments in addition to your total interest too. It may even bring down the lender fees at closing. 


Private Mortgage Insurance (PMI) is often applied to loans when a less than 20% down payment is made. Some prefer to avoid this expense. Though if you don’t have the cash to make such a large down payment now, it can be wiser and more profitable to buy now, with PMI. 

Ease Of Underwriting

A large down payment also makes passing through the underwriting phase of getting a mortgage easier as well. This isn’t always the case. Even low down FHA and VA mortgages can be quite lenient in underwriting. Though the lower the risk for the lender, the less they need to scrutinize the details. 

More Options

Being able to make a larger 10% to 30% down payment can also open up more options for what type of property you can buy, and the loan programs available to you. 

This can specifically show up for jumbo mortgage loans, non-warrantable condos, using RSUs to qualify for a home loan, or purchasing a second home or investment property. 


A bigger down payment means you have more equity. This in turn can give you more freedom and flexibility to refinance your mortgage or sell your home during any phase of the housing market or economy. 

Picking The Optimal Seattle Home Loan Down Payment

What is the optimal down payment? You may not have to put down nearly as much as you thought to buy a house in Seattle. There are great financial advantages of buying sooner, rather than later. Though if you do have more idle cash one hand there are perks of a bigger down payment too.

Speak with a Seattle mortgage broker today to help customize a loan plan for your unique personal situation and goals...

About the Author

Helping Seattleites buy their dream homes for over 15 years. Founder of Seattle's Mortgage Broker and author of Homeownership Simplified: The Truth about ZERO Down.