March 1, 20263 min read
This decision can affect both approval and the cost of the mortgage for years. The best down payment balances four competing goals: buying sooner, minimizing insurance costs, keeping monthly payments manageable and preserving emergency savings.
What changes the outcome
Here is what matters most:
- A smaller eligible down payment keeps more cash available but usually creates a larger mortgage and default-insurance premium.
- Increasing from 5% to 10% can reduce the mortgage and may reduce the insurance premium rate.
- At 20% down, mortgage default insurance is generally not required, but conventional mortgage pricing can differ from insured pricing.
- Using every dollar to reach 20% can be a poor trade if it leaves no money for closing costs or emergencies.
Compare several down-payment scenarios using total cash needed, payment and five-year cost rather than using a single rule of thumb.
Want this applied to your own numbers?
Call Phil Cragg at 866-349-4915 or request a written comparison.
Request a rate quote