diff --git a/activerecord/CHANGELOG.md b/activerecord/CHANGELOG.md
index 79faa9326d..e0ce0af9d6 100644
--- a/activerecord/CHANGELOG.md
+++ b/activerecord/CHANGELOG.md
@@ -1,3 +1,13 @@
+*   Use the default inheritance `:type` when instantiating a new object.
+
+    Example:
+
+        # In the schema, BaseModel specifies 'SubType' as the default `:type` value
+        subtype = BaseModel.new
+        assert_equals SubType, subtype.class
+
+    *Kuldeep Aggarwal*
+
 *   Fix `rake db:structure:dump` on Postgres when multiple schemas are used.
 
     Fixes #22346.
diff --git a/activerecord/lib/active_record/inheritance.rb b/activerecord/lib/active_record/inheritance.rb
index 8b719e0bcb..ed95b30f80 100644
--- a/activerecord/lib/active_record/inheritance.rb
+++ b/activerecord/lib/active_record/inheritance.rb
@@ -55,6 +55,8 @@ module ActiveRecord
           subclass = subclass_from_attributes(attrs)
         end
 
+        subclass ||= subclass_from_defaults
+
         if subclass && subclass != self
           subclass.new(*args, &block)
         else
@@ -201,6 +203,16 @@ module ActiveRecord
         attribute_names.include?(inheritance_column) && (attrs.is_a?(Hash) || attrs.respond_to?(:permitted?))
       end
 
+      def subclass_from_defaults?
+        attribute_names.include?(inheritance_column) && columns_hash[inheritance_column].try(:default)
+      end
+
+      def subclass_from_defaults
+        if subclass_from_defaults?
+          find_sti_class(columns_hash[inheritance_column].default)
+        end
+      end
+
       def subclass_from_attributes(attrs)
         attrs = attrs.to_h if attrs.respond_to?(:permitted?)
         subclass_name = attrs.with_indifferent_access[inheritance_column]
diff --git a/activerecord/test/cases/inheritance_test.rb b/activerecord/test/cases/inheritance_test.rb
index 52e3734dd0..e7709c04c8 100644
--- a/activerecord/test/cases/inheritance_test.rb
+++ b/activerecord/test/cases/inheritance_test.rb
@@ -478,4 +478,24 @@ class InheritanceComputeTypeTest < ActiveRecord::TestCase
     product = Shop::Product.new(:type => phone)
     assert product.save
   end
+
+  def test_inheritance_new_with_subclass_as_default
+    original_type = Company.columns_hash["type"].default
+    ActiveRecord::Base.connection.change_column_default :companies, :type, 'Firm'
+    Company.reset_column_information
+    # this is the case when attrs is a +Hash+, but we didn't specify the type,
+    # so we need default type.
+    firm = Company.new(firm_name: 'Shri Hans Plastic')
+    assert_equal 'Firm', firm.type
+    assert_instance_of Firm, firm
+    firm = Company.new # this is the case when attrs is nil
+    assert_equal 'Firm', firm.type
+    assert_instance_of Firm, firm
+    firm = Company.new(type: 'Client')
+    assert_equal 'Client', firm.type
+    assert_instance_of Client, firm
+  ensure
+    ActiveRecord::Base.connection.change_column_default :companies, :type, original_type
+    Company.reset_column_information
+  end
 end