The 20-Year Cost Comparison: 5% vs. 20% Down
5% vs. 20% down payment total cost comparison — $380K home, 6.5%, 4% appreciation
| Cost Component | 5% Down ($380K Home) | 20% Down ($380K Home) | Difference |
|---|---|---|---|
| Initial down payment | $19,000 | $76,000 | $57,000 more upfront (20%) |
| PMI (until 20% equity, ~4 years) | $9,600 total | $0 | $9,600 extra |
| Interest over 30 years | $432,000 | $384,000 | $48,000 extra |
| Opportunity cost of delayed HELOC access | Significant | None | Market-dependent |
On a $380,000 home, choosing 5% over 20% down costs approximately $57,600 in additional interest + PMI over the first 10 years — net of the $57,000 saved upfront on the down payment. The advantage of 5% down: earlier market entry captures appreciation during the 3–4 year saving window. In a 4% appreciation market, the home appreciates $46,000 during a 3-year wait — making 5% down and early entry roughly equivalent to 20% down 3 years later.
The 10-Year Equity Gap
10 and 20-year equity trajectory by down payment — $380K home, 6.5%, 4% appreciation
| Starting Position | Year 5 Equity | Year 10 Equity | Year 20 Equity |
|---|---|---|---|
| 5% down ($19K) | $72,000 | $128,000 | $270,000 |
| 10% down ($38K) | $91,000 | $148,000 | $290,000 |
| 20% down ($76K) | $128,000 | $185,000 | $328,000 |
When Low Down Payment Still Makes Sense
The 5% down payment makes financial sense when: (1) the market is appreciating at 4%+ per year — appreciation during a 3-year wait to save 20% often exceeds PMI costs; (2) first-time buyer programs reduce or eliminate PMI; (3) you’re in your 30s with long equity-building runway; (4) the alternative is renting at a cost higher than the PMI premium.
Project Your Equity From Today’s Starting Point
Enter your current equity position and see the 20-year trajectory.