NCperson
Level 15

Home loans

the percentage is really based on how much you can afford to borrow, size of home you want to buy, etc.

 

but here is the critical issue:

 

interest rates are generally the same if you put 20% or more down.  (yes, the rate can be higher if you are taking cash out in a refinance, purchasing the property for investment, etc, but if you are purchasing a home with the intent to live in it, the rates are generally the same if you put down 20% or more) 

 

for conventional mortgage the interest rate will rise as you put less down in the form of the mortgage insurance premium requirements.   basically with less th 20% down, the risk of you defaulting rises and the lenders will require mortgage insurance to protect against the risk that you default.  You will pay the insurance premiums.

 

for government loans, there is always a mortgage insurance premium (MIP) regardless of how much you put down.  So as you are able to put more down, the conventional loans are more cost effective.