Why a 20% home down payment may not be worth it
It's tough to feel financially prudent when buying a house these days.
That's why an increasing number of first-time buyers are saving a down payment of 20 per cent or more. In doing so, they avoid having to buy mortgage default insurance which, in the case of a house price of $487,095 (the national average) bought with a 10 per cent down payment, would be 3.1 per cent or $13,590. This premium is generally added to the mortgage, which means more interest to pay.
It certainly sounds financially prudent to make a 20-per-cent down payment where possible, but this isn't always the case. In fact, you may save money both now and in the future by…