20% Down vs 10% Down on a $1.5 Million Boston Home

For a $1.5 million home, the difference between 10% down and 20% down is substantial.

But bigger isn't always better.

Let's look at both sides.

Option 1: 20% Down

Purchase Price: $1,500,000

Down Payment: $300,000

Mortgage: $1,200,000

Benefits:

• Lower monthly payment

• No PMI

• Stronger equity position

• Greater financial flexibility

Drawbacks:

• Requires significantly more cash upfront

• May delay your purchase timeline

Option 2: 10% Down

Purchase Price: $1,500,000

Down Payment: $150,000

Mortgage: $1,350,000

Benefits:

• Enter the market sooner

• Preserve liquidity

• Keep additional cash invested

Drawbacks:

• Larger monthly payment

• Potential mortgage insurance

• More interest paid over time

The Hidden Question

Most buyers focus on the mortgage.

The better question is:

Consider two buyers.

Buyer A puts down 20%.

Buyer B puts down 10%.

If Buyer A ends up with only a few thousand dollars remaining in savings, the larger down payment may actually create more financial risk.

If Buyer B maintains substantial reserves, the smaller down payment may provide more flexibility.

The Ramsey Perspective

Dave Ramsey strongly favors 20% down.

The reason isn't simply to avoid PMI. It's because buyers who save larger down payments tend to enter homeownership from a position of financial strength. Less debt generally creates more financial freedom.

When 10% Down May Make Sense

A smaller down payment may be worth considering if:

• You have substantial reserves

• Your income is stable

• You want to preserve liquidity

Waiting years to save another $150,000 creates opportunity costs

The key is ensuring the decision improves your overall financial picture.

The Bottom Line

The best down payment isn't necessarily the largest one.

It's the amount that allows you to buy responsibly while maintaining a strong financial foundation.

Before deciding between 10% and 20%, evaluate:

• Monthly payment

• Cash reserves

• Emergency savings

• Long-term investing goals

Because the goal isn't simply to get into the house.

The goal is to build wealth after you move in.