Buyers Use Larger Down Payments to Offset Rising Rates July 10, 2013 2:49 pm

Written By: Broderick Perkins

To keep monthly mortgage payments more affordable, more home buyers are reaching deeper into their pockets to make larger down payments, according to a new survey by LendingTree of 600 home buyers.

Sixty-four percent of prospective home buyers say they expect mortgage rates to rise, and 68 percent say they expect home prices to rise in the next 12 months, according the LendingTree survey. That has prompted 57 percent of respondents to say they plan to make a down payment of 15 percent or more on their home purchase. Meanwhile, 44 percent say they will have a down payment of less than 15 percent.

Also for affordability, the majority of home buyers surveyed said they prefer fixed-rate mortgages, particularly 30-year fixed-rate mortgages (45%), compared to 15-year fixed-rate mortgages (36%) and adjustable rate mortgages (7%).

“The housing market is stabilizing and financing is becoming more available for potential home buyers,” says Doug Lebda, founder and CEO of “Increasing home prices are providing would-be sellers with the confidence needed to take action, while rising interest rates are placing a sense of urgency on potential home buyers. Together this creates a unique window of opportunity for buyers and sellers to take advantage of the market while home prices and rates are still reasonably affordable.”

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