What Should I Put Down?

There isn't much you can do about interest rates, but you can reduce your mortgage payment with a larger down payment.
The size of your mortgage payment is determined by two factors – the interest rate and how much you borrow. There isn't much you can do about interest rates, but you can reduce your mortgage payment with a larger down payment.
 
Below you can see the impact of having a larger down payment (Assumes an interest rate of 3.5% and a 30 year amortization):
 
Cost of the Home Down Payment Mortgage Amount Monthly Payment
$250,000 $25,000  $225,000 $1,010.35
$250,000 $50,000 $200,000 $898.09
$250,000 $65,000 $185,000  $830.73
$250,000 $75,000 $175,000 $785.83
$250,000 $100,000 $150,000 $673.57
As this example illustrates, the higher you go in the Down Payment column, the lower the figure in the Monthly Payment column. Few people are going to be able to put $100,000 down on a $150,000 mortgage, but experts do recommend a down payment between 5% and 25% of the home purchase price. Calculate how a different down payment amount will affect your payments.

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You may already have some savings, but establishing a disciplined savings habit can help you increase those savings, increase your down payment and reduce your monthly mortgage payment.
 
Even small changes can make a difference.
Use our Spend Less Calculator to forecast how your savings will accumulate just by making small adjustments in what you spend today. 
 

There is no easier way to save than with an automatic savings plan. If you are already using direct deposit for your paycheck, talk to your banker about transferring the amount each month. You can also have your employer deduct the amount each month and deposit into the account of your choice.

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