This Is the Minimum Amount I Will Put Down When Buying a House

I'm buying a house soon. I've purchased properties several times over the past few years as I've moved into different neighborhoods that are a better fit and also added a vacation home to my assets.

This time when I get a mortgage and purchase a new house, I have committed to putting a set amount down on the property. This is the same rule I set for myself when it comes to the down payment on every house I've bought except my first one. Here's how much I will be putting down.

This is the minimum down payment I'm willing to make

When I buy my house, the rule I have set for myself is that I will make a 20% down payment. I will not purchase a home until I am able to put that amount of money down on the property.

I'm the minority in making such a large down payment. The National Association of Realtors reports that the typical repeat buyer puts about 17% down on a home. While this is higher than the typical down payment made by first-time buyers (which has been hovering as low as 6% to 7% since 2018), it's still below the amount I'm putting down on my property.

It's also more than most mortgage lenders require, as lenders will usually give you a loan with just 10% down and sometimes with as little as 3%.

Why putting down less than 20% isn't an option for me

Although lenders may not require a 20% down payment, and most people put less down, I've made this rule for myself for a few simple reasons.

The biggest reason why I am unwilling to make a smaller down payment is that I don't want to pay for private mortgage insurance, or PMI. PMI is a cost lenders impose on borrowers who make down payments of 20% or less. It can cost as much as 2% of the loan amount annually, which is a huge amount of money. And, it only protects the lender from losses in case of foreclosure.

With my first house, I put less than 20% down and I paid PMI every single month. I was annoyed each time I wrote a check for my mortgage payment that I was "wasting" money buying protection for the lender. This was money I couldn't use for other things.

When we bought our first home and had only a 10% down payment, we also ended up having to pay an interest rate that was a bit higher than it would have been had we put more down. So I felt like this was even more "wasted' money.

When it came time to sell our house, we made a profit on it but since we didn't have a ton of equity in the home due to our low down payment, we didn't walk away with a whole lot after paying the closing costs.

I don't want to get stuck with higher mortgage costs again -- especially since rates are a lot higher now than when I got a loan for my first home. So, for all of these reasons, putting 20% down is non-negotiable when I buy my new home.