Free PDF guide
Down Payment Decision Guide: Why 20% Isn't Always Right
What 10%, 15%, and 20% down actually cost in PMI and cash reserve — before you pick a number.
What's inside
- ✓The four questions that actually determine your down payment number — not what your lender approved or what your parents did
- ✓What PMI actually costs at each tier, with real dollar ranges on a $350,000 loan
- ✓A worksheet comparing 10%, 15%, and 20% down against your true cash reserve and rate improvement at each tier
3 key takeaways
Is 20% down always the right move?
Only if you also have 2–5% for closing costs and $15,000–$25,000 left in reserve. A buyer who puts 20% down and has $0 left is more exposed than a buyer who puts 15% down and keeps $20,000 in reserve.
What does PMI actually cost?
Typically 0.5%–1.5% of the loan amount per year — $145–$437/month on a $350,000 loan. It cancels at 20% equity, whether by paydown or appreciation.
How much does a lower down payment actually cost in rate?
Crossing an LTV tier (95%, 90%, 85%, 80%) often changes your rate meaningfully — a 0.25% improvement on a $380,000 loan saves ≈$570/year, 0.50% saves ≈$1,140/year. Compare that to the PMI cost at each tier.
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