Is Waiting to Save 20% Costing You More Than PMI Ever Would?

One of the most common pieces of financial advice given to homebuyers is: wait until you have 20% down so you can avoid PMI. But what if I told you that strategy could be costing you tens of thousands of dollars?

Let’s break it down with some real-world numbers.

🏠 The Scenario:

• You find a home today listed at $500,000.

• Instead of putting down 20%, you decide to move forward with just 5% down—that’s $25,000.

• With less than 20% down, you’ll likely pay PMI (Private Mortgage Insurance)—about $140/month, depending on your credit.

You could potentially get rid of PMI in as little as 2 years, but let’s assume the worst-case and say you pay it for 5 full years:

📉 PMI Cost Over 5 Years:
$140/month x 60 months = $8,400

Now let’s look at what happens if you wait five years to buy, hoping to save the full 20% down payment.

🏡 That same $500K house, appreciating at just 3% annually, would now cost about $579,000.

Instead of needing $100K down (20% of $500K), now you need $115,800 down. You just paid $79,000 more for the same house.

💡 The Bottom Line:

By trying to save $8,400 in PMI, you may have cost yourself $79,000 in home appreciation. That’s not even counting five years of rent payments or lost equity growth.

So, is PMI a waste of money? Not if it gets you into the market sooner.

In many cases, the smart move isn’t waiting—it’s buying now and letting the market work in your favor.

Final Thought:
Waiting for perfect can cost you real money. Don’t let the fear of PMI keep you from building wealth through homeownership.

If you're on the fence, let's run the numbers together—your future self will thank you.