Research question
Across down payments from 3% to 30%, how do cash required, mortgage insurance, the monthly payment and lifetime interest trade off?
Dataset
- A $500,000 home at 6.71% (PMMS), 30-year fixed, 1.1% tax, $150/mo insurance.
- Seven down payments: 3%, 5%, 10%, 15%, 20%, 25%, 30%.
- Cash required = down payment + 3% estimated closing costs.
Methodology
- Compute monthly P&I, tax, insurance and PMI for each down payment.
- Cash required = down + 3% closing cost estimate.
- Lifetime interest = monthly P&I × 360 − loan amount.
Calculations
| Down | Cash required | MI / mo | Monthly payment | Lifetime interest |
|---|---|---|---|---|
| 3% down | $30,000 | $606 | $4347 | $642,814 |
| 5% down | $40,000 | $396 | $4072 | $629,560 |
| 10% down | $65,000 | $281 | $3796 | $596,425 |
| 15% down | $90,000 | $177 | $3531 | $563,290 |
| 20% down | $115,000 | — | $3192 | $530,156 |
| 25% down | $140,000 | — | $3031 | $497,021 |
| 30% down | $165,000 | — | $2869 | $463,886 |
$500,000 home, 6.71%, 30-yr. Reports the numbers; it does not recommend a level.
Monthly payment by down payment
Full monthly payment (PITI + MI where applicable).
3% down$4347
5% down$4072
10% down$3796
15% down$3531
20% down$3192
25% down$3031
30% down$2869
Findings
- Cash required rises linearly with the down payment; the monthly payment falls but with diminishing returns once MI drops off at 20%.
- The biggest monthly-payment step is between 5% and 20% down, because mortgage insurance disappears at 20%.
- Lifetime interest falls with the loan amount, so a larger down payment saves interest every month for 30 years — not just the MI.
Limitations
- Closing costs are estimated at 3% of price, not a lender quote.
- Excludes down-payment assistance and gift funds.
- Uses one credit band for MI; actual MI varies.
Sources
Last updated & change history
Last updated: 2026-09-21
- 2026-09-21 — Initial study.