For years, home buyers have heard the same advice: try to put 20% down when buying a home.

There are good reasons behind that number. A larger down payment reduces how much you need to borrow, can lower your monthly mortgage payment, and may help you avoid private mortgage insurance on a conventional loan.

But putting 20% down is not automatically the right choice for every buyer.

For someone buying in Myrtle Beach, North Myrtle Beach, or Little River, the better question is: How much does putting 20% down actually save you, and how much cash will you have left after closing?

What Changes When You Put 20% Down?

The first difference is simple: you borrow less.
Consider a $400,000 home:

20% down means an $80,000 down payment and a $320,000 mortgage.
10% down means a $40,000 down payment and a $360,000 mortgage.
5% down means a $20,000 down payment and a $380,000 mortgage.

The larger your down payment, the smaller your starting loan balance. That generally means a lower monthly principal-and-interest payment and less interest paid over time.

According to the Consumer Financial Protection Bureau’s guidance on choosing a down payment, a larger down payment generally reduces borrowing costs. Reaching 20% can also bring additional savings for conventional-loan buyers.

Your actual savings will still depend on your mortgage rate, loan term, loan type, credit profile, and how long you keep the mortgage.

One of the Biggest Differences: PMI

For many buyers using a conventional mortgage, one of the most noticeable benefits of putting 20% down is avoiding private mortgage insurance, or PMI.

The CFPB explains how private mortgage insurance works and notes that PMI may be required when a conventional-loan buyer puts down less than 20%. PMI protects the lender rather than the homeowner if the borrower stops making payments.

Avoiding PMI can lower the monthly cost of the mortgage in addition to reducing how much you borrow.

For buyers comparing homes or condos around Myrtle Beach and North Myrtle Beach, that monthly difference can be worth considering alongside other property-specific costs.

A Larger Down Payment Can Reduce Interest Costs

A larger down payment also reduces the amount of money on which mortgage interest is charged.

Using the same $400,000 example, a buyer putting 20% down begins with a $320,000 mortgage instead of the $380,000 mortgage created by a 5% down payment.

That is a $60,000 difference in the amount initially financed.

Over time, borrowing less can reduce the amount of interest paid. But there is no single savings number that applies to every buyer. Interest rates, loan terms, refinancing, additional principal payments, and how long you own the property can all change the final cost.

This is why asking your lender for several loan scenarios can be more useful than assuming one down-payment percentage is automatically best.

South Carolina home exterior graphic illustrating how a larger down payment can leave buyers with less cash available after closing.

But Putting More Down Has a Cost Too

There is another side to the calculation.

Every additional dollar you put toward the home is money you no longer have available in savings after closing.

The CFPB recommends considering your remaining savings and other upfront home-buying expenses before deciding how much cash to commit to a purchase.

For buyers along the South Carolina coast, this can be especially relevant. Depending on the property, you may also need to budget for expenses such as homeowners insurance, flood insurance when applicable, HOA dues, maintenance, furnishings, and repairs.

Imagine a buyer purchasing a $400,000 home in Little River with enough savings to put $80,000 down.

Putting the full 20% down may lower the mortgage and eliminate PMI on a conventional loan. Putting $40,000 down instead leaves another $40,000 available for closing expenses, reserves, repairs, or other priorities.

The tradeoff is a larger loan and potentially higher monthly costs.

That is why the largest possible down payment is not always the most practical choice.

What Should South Carolina Buyers Compare?

Instead of automatically treating 20% as the target, ask your lender to prepare several scenarios.

Compare:

Cash required at closing
Monthly principal and interest
Mortgage insurance, if applicable
Interest rate
Estimated borrowing costs
Cash remaining after closing
Property insurance and HOA costs
Emergency savings and other financial priorities

Down-payment requirements also vary by mortgage program and lender. The CFPB’s mortgage guidance on down-payment options explains that buyers may have options below 20%, depending on the financing program for which they qualify.

Freddie Mac also offers a down payment calculator that can help buyers compare how different down-payment amounts may affect estimated mortgage costs before reviewing exact numbers with a lender.

So, How Much Does 20% Down Really Save You?

Putting 20% down can reduce the amount you borrow, lower monthly principal-and-interest costs, decrease the amount of interest paid over time, and typically help conventional-loan buyers avoid PMI.

But there is another number to consider: how much cash remains available after closing.

For buyers looking in Myrtle Beach, North Myrtle Beach, and Little River, the right down payment should account for the mortgage as well as the ongoing costs of the specific property you are considering.

The McAlpine Team can help you compare homes and understand the real estate costs involved in your South Carolina purchase while your lender works through the financing numbers. That gives you a clearer picture of the options before you make an offer.