How Does a Down Payment Affect My Mortgage?
- By Jim Blackburn
- on
- 100 first time home buyer FAQs
1. Bigger Down Payment = Smaller Loan and Lower Monthly Payments
1. Bigger Down Payment = Smaller Loan and Lower Monthly Payments
When you put more down, you borrow less. That means:
Lower monthly mortgage payments
Less total interest paid over the life of your loan
Better loan terms in many cases (including lower rates)
Even a few extra thousand dollars can make a noticeable difference in your monthly budget and long-term savings.
Want to see the exact impact? Calculate your Conventional Purchase Loan Payment now to compare monthly payments and total interest costs at different down payment amounts—from 3% to 20% and beyond.
2. 20% Down Helps You Avoid PMI
If you put down less than 20% on a conventional loan, most lenders will require Private Mortgage Insurance (PMI). This is a monthly fee that protects the lender—not you.
Hitting 20% equity = no PMI Avoiding PMI can save hundreds per month You can also cancel PMI later once you build up equity
PMI isn’t a deal breaker—but it’s good to know when you’re budgeting your monthly payment.
See how different down payments affect PMI costs. Calculate your Compare 2 Rates (Interest Costs) now to compare scenarios with and without PMI and understand the true cost difference.
3. Don’t Have 20%? There Are Still Great Options
Many first-time buyers put down 3% to 5%, and that’s okay!
- FHA loans allow as little as 3.5% down
- Some conventional loans offer low down payment programs
- VA and USDA loans offer 0% down options for qualifying buyers
It’s not about hitting a magic number—it’s about making a smart, sustainable choice based on your savings and financial goals.
Ready to explore low down payment options? Calculate your FHA Purchase Loan Payment now to see how 3.5% down makes homeownership accessible while you preserve savings for closing costs and emergencies.
If you’re a veteran, zero down payment might be possible. Calculate your VA Purchase Loan Payment now to explore how VA financing eliminates both down payment requirements and PMI—a powerful combination for eligible buyers.
Wondering How Much to Put Down? Let’s Find the Sweet Spot for You
At Stairway Mortgage, we meet you where you are—and help you take the next smart step toward owning your future.
📘 Download our homebuyer guides about down payment strategies.
📊 Check Current Rates for different down payment scenarios.
🧮 Compare options with our Conventional Purchase Calculator.
🏠 Explore low down payment options on our Buy a House page.
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