How much should your home down payment be?

By Robin Wetherbee

September 2015

My husband and I were 27 when we bought our house. We had no idea what we were doing. But motivated by our mutual dislike for paying rent for a crappy apartment, we dove in.

With great luck and the recommendation of a friend, we had our real estate agent, Michael, for guidance. He helped us figure out what we could comfortably and conservatively afford, advising us not to strap ourselves with too great of a house payment. Michael helped us think things through with regard to the kind of house we wanted and where we could afford to live. He also helped us determine how much money we would need for a down payment. (Nowadays, we might have tried an online down payment calculator in addition to consulting a trusted professional like Michael.)

Down payment considerations: the line in the sand

Michael laid out what our down payment options were: If we had enough for 20% down, we could finance without mortgage insurance; if we put less down, our lender would require us to get it.

Here are some other considerations Michael gave us.

20% or more down

  • Pro: The larger your down payment, the lower your monthly mortgage payment
  • Pro: Your lender will not require mortgage insurance — that’s one less expense each month
  • Con: It may take you longer to save up your down payment
  • Con: By the time you’ve saved up for a down payment, the home you want to buy may not be on the market or its price may have increased

So, for example, a 20% down payment on a home priced at $150,000 would be $30,000. 

Less than 20% down

  • Pro: Your savings goal will be smaller, so you’ll need less time to reach it
  • Pro: You’ll be able to buy sooner than later
  • Con: The smaller your down payment, the larger your monthly mortgage payment
  • Con: Your lender will require FHA or private mortgage insurance — an additional expense included with your mortgage payment. (If you finance with private mortgage insurance, typically, you can cancel it once you have enough equity in your home.)

So, for example, a 10% down payment on a home priced at $150,000 would be $15,000; a 5% down payment would be $7,500.

Where we landed

It wasn’t long before we found The Little House of Our Dreams with a price tag in our range. We had been saving, but were nowhere near the amount we needed for 20% down. Our worry was that, in the time we’d need to save the difference, somebody else could buy it.

We scraped together a 10% down payment, becoming all too familiar with Kraft macaroni and cheese in the process. And we financed using private mortgage insurance.

After we had been in our home for four years, Michael sent us a letter reminding us that we may be able to cancel our mortgage insurance. So we did — and we reduced our mortgage payment doing so.

Kendra Lashawn Burch


Kendra Burch

Very informative

Dione johnson

Very helpful

Victor Rivera

Informative thank you

Eyonnie Young

Very helpful

Jose Quezada

This test help a lot is very good



Daisy Salas

Great help for firs time

Rey George Pascua

Great help for home buyers

Erika Sandoval

This was very helpful.

Eduardo Montejo Nunez

The course is a great help for first home buyers


This really has helped me to know about buying a house and what you need to do.

Justin Salisbury


Justin Salisbury

It was helpful

Derrick McBride

It was very helpful thank you


Very informative


Great information

Oscar perez


Regina Vickers

This is a great source of information especially for first time home owners

Shelia Gibson

Great read

Gary hensley

Again I was happy to be able to read this and get good information

Cassandra Daniel

That is wonderful.


It’s helpful to know so what happens if you pay more every month will it help

Mohammed Rashad khan

That's good

Takayia Emerson



Very helpful

Cyntraila Tanner

250,000 3% 7500

Rodney Corley

Very informative.


Thank you this is helpful

Nora Carbajal

This is going to be my forever home. Also a investment for My children’s future.

Abdullah Khan

Helpful information!

Peguy Andrevil

I can’t wait for my closing day. I am so proud to be a landlord now.

Michelle Briscoe

Great content

Amelia Garcia

Very Helpful!

Amelia Garcia

Very helpful!!

Karla Sanchez

Nice explanation



Adame Ndaw Epse Mitchell

Helpful ready to buy. Thank you for the information

Vrijeshkumar P Patel

Very Helpful



My name is Friday Agori

Thanks for your advice and guidance towards the home ownership guide line and I will use all the information learnt from this lesson to purchase my first home

Montie RIOS

Good information Thank you

Tommeco Jones

20 percent or more of price of home purchase

Jonas Casseus

This a good opportunity for me to buy my first house and I can’t wait to move in . That’s will make me happy cause my birthday coming soon this month.

Stephen Kennedy

Thank it make me feel better on buying and cost less than renting thank on information


This was good information. Ready to buy my first house.

Aslin Maravilla

Very Helpful


This the key !The larger your down payment, the lower your monthly mortgage payment!

Monashary D Boston

Buying my home now

Monashary D Boston


Asia Walters

Very good information

Erwin Peralta

Very helpful but I'm ready to buy a house.

Charletta morrow

Very helpful


Very helpful

Demarco Mcdaniel

Out of pocket cost are very important to me

Jessica Puga

Very helpfull.

David Jordan

Very useful and informational!

Dennis Ziegler


Laxman Dahal

This’s first time we buying property so hopefully will help me out to catch the goal thanks

Kenny arroyo

I always wanted a home

Kaddour Yamani

I am ready to buy a house

Norris H Matthews

Very useful

Abe Bauer

I’m buying the house

Maryann Z Eberly

im ready to buy a house.

Susanna Ehrmann

very informative, especially for first-time buyers

Brenda Rojo

Wow very informative

John carlos medeiros


Sandra Croom

Thanks for the info

Sabrine Tignor


Lourdes corona

My Realtor finally found the house I wanted

Talisha Scott Stephen Santiago

This was very helpful.

Fran Laycock

This was very interesting and made a lot of sense.

Fran Laycock

Thus is very helpful. Thank you

John Hershberger

Thanks for the info

Tanya Jenkins

I really would like to buy this house that I’ve been living in for the last past three years but I don’t know how to go about buying it

Jovanny Hernandez

I don’t know to much english, I just want to thank you for helping me . I will work hard to keep my home, thank you again

christopher doherty

Great info. Thank you


Great information.

Rose Bakies

Very helpful.

Antonio Davis

Definitely helpful !

Brandon baker

Really made me feel better about buying a house thanks



Elisa V Rice


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Robin Wetherbee has been writing for MGIC about mortgage insurance and homeownership since 1989. She and her handsome husband reside in Milwaukee’s Bay View neighborhood. They share their freshly empty nest, which she calls her “Miracle on 34th Street” house (if you’ve seen the 1947 movie, you’ll know exactly what she means) with their big old black cat, Max Rayfield Gilhooly.
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