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.
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.
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.
Wondering How Much to Put Down? Let’s Find the Sweet Spot for You
Download our free “Down Payment Strategy Guide” — includes payment comparisons and PMI savings examples
Chat live now to explore low down payment loan options
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