20% Down Payment · Home Affordability · 2026
A 20% down payment eliminates PMI entirely, maximizes your purchasing power within the 28% rule, and qualifies you for the best available mortgage rates — the gold standard for home financing.
20% Down — Key Facts
No PMI. Zero. This is the primary financial benefit of 20% down — eliminating $100–$300+/month in PMI that would otherwise persist for 7–10 years.
Programs accepting 20% down: All conventional programs, best rate tier, no PMI
By Income
Assumes 7.0% rate, typical debts per income level, 1.1% property tax, $150/mo insurance, 30-year term.
| Annual Income | Down Payment | Max Home Price | Monthly PITI | PMI? |
|---|---|---|---|---|
| $50,000 | $10,000 | $134,000 | $1,170/mo | No |
| $60,000 | $12,000 | $164,000 | $1,401/mo | No |
| $75,000 | $15,000 | $210,000 | $1,754/mo | No |
| $80,000 | $16,000 | $225,000 | $1,869/mo | No |
| $90,000 | $18,000 | $255,000 | $2,099/mo | No |
| $100,000 | $20,000 | $286,000 | $2,337/mo | No |
| $125,000 | $25,000 | $362,000 | $2,921/mo | No |
| $150,000 | $30,000 | $438,000 | $3,504/mo | No |
| $200,000 | $40,000 | $589,000 | $4,662/mo | No |
All conventional programs, best rate tier, no PMI. These programs are specifically designed to help buyers enter homeownership with less cash upfront, though each has specific requirements around credit score, income limits, and property type.
No PMI. Zero. This is the primary financial benefit of 20% down — eliminating $100–$300+/month in PMI that would otherwise persist for 7–10 years.
The right down payment depends on your market, savings rate, and risk tolerance. In appreciating markets, buying sooner with 20% down often generates more equity over 5–7 years than waiting to save more. In flat markets, a larger down payment reduces PMI drag and improves your monthly cash flow. Use the income table above to compare your specific scenario.
Twenty percent down eliminates PMI (saving $100–$300/month), qualifies you for the best rate pricing tiers, and gives you the maximum loan capacity within the 28% front-end rule. It also means you start with 20% equity — no risk of being underwater if values dip modestly after purchase.
Twenty percent of your target price: $50K on a $250K home, $70K on a $350K home, $100K on a $500K home. At $80K income saving $10K/year, reaching 20% on a $350K home takes 7 years. Trade-up equity from a prior home is the most common source for move-up buyers.
Not always. In fast-appreciating markets, buying now with 5% down and investing the other 15% may produce better total returns over 7–10 years than waiting to save 20%. The PMI cost of 5% down on a $300K home is roughly $1,500–$2,400/year — often less than 1–2 years of market appreciation on the home. Model your specific market before waiting.
With 20% down, lenders are significantly more flexible on credit score since there's no PMI insurer to satisfy. Most conventional loans require a minimum 620 score, but 680+ gets you prime pricing. VA loans with 20% down have no minimum score requirement (though lenders typically require 620+).
Yes — any amount above 20% reduces your loan balance further and lowers monthly payments. However, there's no additional PMI benefit above 20%. Extra down payment above 20% earns you the mortgage rate (7%) as a guaranteed return — compare this to expected returns on your alternative investments before putting in more than 20%.