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Informational only. Not mortgage advice. Consult an NMLS-licensed loan officer for personalised guidance.
10 Percent Down Mortgage Pre-Approval 2026
10 percent down is the conventional sweet spot. PMI is meaningfully cheaper than at 5 percent down, the LLPA matrix is friendlier, you keep more cash for reserves, and PMI cancels in roughly 9-11 years through amortisation alone. It also opens second-home conventional financing, a piggyback strategy that some borrowers prefer over PMI, and a narrow path into jumbo at 10 percent down with select investors. This page maps when 10 percent is the right call.
All figures as of May 2026. Program rules per Fannie Mae Selling Guide and PMI rates from major MI provider rate sheets.
Quick Answer at 10% Down
$400K home, 680 FICO conv: $40,000 down + ~$10,000 closing
Monthly PITI: ~$3,170
Assumes 6.75% rate, 1.1% property tax, $1,500/yr insurance, 0.75% annual PMI. As of May 2026.
Why 10 Percent Beats 5 Percent on Most Loans
The conventional LLPA matrix steps down meaningfully at 90 percent LTV (10 percent down) compared to 95 percent LTV (5 percent down). At 680 FICO the LLPA drops 0.500 points, which is about $1,500 in fees on a $300K loan or 0.125 percent off the rate. PMI also drops about 0.20 percentage points (annual rate) going from 95 to 90 percent LTV, which is roughly $50 a month on a $300K loan.
Combined, the move from 5 to 10 percent down saves about $80-$100 a month in carrying cost while requiring an extra $15K-$20K in cash on a typical purchase. The simple payback period is 12-18 months. If your goal is the lowest monthly payment and you can spare the cash, 10 percent down is almost always better than 5 percent down. The exception is if the extra cash is essential as a reserve for home repairs, job-loss buffer, or other emergency needs.
Going from 10 to 20 percent down is a different calculus: the second 10 percent eliminates PMI entirely (typically saving $150-$300 a month), but requires another $30K-$80K in cash. The break-even is usually 8-15 years depending on credit tier. If you would otherwise invest the cash and earn more than the PMI rate, keeping the cash invested wins.
PMI Cost at 10 Percent Down by FICO
Borrower-paid monthly PMI on conventional 30-year fixed, 90 percent LTV. Rates from major MI providers as of May 2026.
| FICO Tier | Annual PMI Rate | Monthly on $300K loan | Monthly on $400K loan | Monthly on $600K loan |
|---|---|---|---|---|
| 620-639 | 1.20% | $300 | $400 | $600 |
| 660-679 | 0.95% | $238 | $317 | $475 |
| 680-699 | 0.75% | $188 | $250 | $375 |
| 700-719 | 0.60% | $150 | $200 | $300 |
| 720-739 | 0.55% | $138 | $183 | $275 |
| 740+ | 0.50% | $125 | $167 | $250 |
PMI cancels automatically at 78 percent LTV on the original amortisation schedule, or earlier with a documented appraisal at 80 percent LTV.
The Piggyback Alternative (80/10/10)
A piggyback structure replaces PMI with a second mortgage. The first lien sits at 80 percent LTV (no PMI), the second lien at 10 percent LTV (HELOC or fixed second), and the borrower brings 10 percent down. The strategy is most often called 80/10/10 (the three components by percentage of purchase price).
The economic case: on a $400K home, the first $320K is conventional at the best LTV pricing (~6.50 percent), the next $40K is a HELOC at prime plus 0-50 basis points (currently ~7.50 percent), and the borrower brings $40K. The blended monthly payment on the two mortgages is roughly $2,300, vs $2,400 for a single 90 percent LTV conventional with PMI. The piggyback saves $80-$100 a month and lets the borrower pay off the smaller second aggressively if cashflow improves.
The downsides: two loans, two closings (some lenders bundle), the second is variable-rate if HELOC, the HELOC market can dry up in financial stress (less liquidity than first-lien in 2008-2009 freeze), and qualifying for both can be tighter than a single PMI loan. Piggybacks were dominant pre-2008 and have come back into vogue as PMI prices and rates have both risen.
The decision: piggyback wins below 700 FICO where PMI prices steeply; PMI wins at 740+ where PMI prices low and HELOC rates dominate the blend. The crossover is around 700-720 FICO.
10 Percent Down for Second Homes
Conventional second-home loans allow 10 percent down per the Fannie Mae Selling Guide section B5-6, with the borrower signing a second-home occupancy declaration (must occupy at least part of the year, cannot be rented year-round, must be a reasonable distance from primary residence).
Pricing on second homes runs 0.50 to 0.875 percent above the same primary-residence loan at the same FICO and LTV, due to a specific second-home LLPA adjustment. On a $400K second home at 740 FICO with 10 percent down, expect roughly 7.25 percent rate, vs 6.75 percent for the same loan on a primary residence.
Reserves required: 2 months of PITI on primary plus 2 months of PITI on the second home for second-home purchases, with stricter requirements (4-6 months on the second home) for some lenders. The reserve discipline can be the binding constraint for buyers who would otherwise qualify on income.
Frequently Asked Questions
Is 10 percent down a good strategy in 2026?
Yes, for most buyers with 660+ FICO and stable employment. 10 percent down hits a sweet spot: PMI is meaningfully cheaper than at 5 percent down, the LLPA matrix steps down, you keep more cash for reserves and home repairs, and PMI cancels through amortisation in about 9 years (faster with appreciation). The opportunity cost of putting an extra 10 percent down (going to 20 percent to skip PMI) is the difference between PMI cost and the after-tax return on the cash, which usually favours keeping the cash invested at modest credit profiles.
What PMI will I pay at 10 percent down?
At 90 percent loan-to-value, annual PMI ranges from 1.20 percent at 620 FICO down to 0.50 percent at 740 FICO. On a $400K loan (10 percent down on $444K home), that is $400 a month at 620, $250 at 680, and $167 at 740. PMI cancels automatically at 78 percent LTV on the original amortisation schedule (around year 11), or you can request cancellation at 80 percent LTV based on a current documented appraisal (sometimes triggered by appreciation in year 3-5).
Should I do a piggyback (80/10/10) instead of PMI?
Sometimes. An 80/10/10 stacks a first mortgage at 80 percent LTV (no PMI), a second mortgage at 10 percent LTV (typically a HELOC or fixed second at 1.50-2.50 percent above first-lien rate), and 10 percent down. The math favours a piggyback when the blended rate plus the second-mortgage interest is lower than the first-mortgage rate plus PMI. With current rate spreads and the HELOC market priced near prime plus 0-50 basis points, piggybacks usually win at 620-680 FICO and lose at 720+. The downside is two payments and dependence on the HELOC market for the second.
Is 10 percent down enough for a second home?
Yes, on most conventional second-home programs. Fannie Mae and Freddie Mac both allow 10 percent down on second homes per the selling guides, with the borrower signing an occupancy declaration (must occupy at least part of the year, cannot be a year-round rental). Pricing is typically 0.50-0.875 percent above primary at the same FICO and LTV. Some lenders overlay to 15 or 20 percent down on second homes; check before assuming 10 percent works.
Can I do 10 percent down on an investment property?
No, not on conventional. Conventional investment property requires 20-25 percent down (15 percent only on 1-unit with very strong credit profile, rare). FHA investment is restricted to owner-occupied 2-4 unit, where 3.5 percent down is allowed if the buyer lives in one unit. Pure investment property purchases at 10 percent down do not exist in the standard agency or FHA program menu. DSCR loans (debt-service-coverage-ratio) sometimes allow 20 percent down at higher rates.
How does 10 percent down work with jumbo loans?
Most jumbo programs require 20 percent down minimum, with a handful of private-bank and broker programs accepting 10 or 15 percent down at premium pricing. At 10 percent down on a $1M jumbo, expect a rate premium of 0.50-1.00 percent above the same loan at 20 percent down, plus mandatory PMI or lender-paid MI (which gets built into the rate). The 10-percent-down jumbo market is a niche that requires shopping multiple lenders.
How long until PMI drops at 10 percent down?
Under the federal Homeowners Protection Act, PMI cancels automatically when the principal balance reaches 78 percent of the original property value on the original amortisation schedule. At 6.50 percent rate on a 30-year loan, that is around month 132 (year 11). You can request cancellation earlier when the balance reaches 80 percent LTV based on current appraised value, which is often achievable in years 3-5 in appreciating markets. The appraisal costs $500-$700 and saves $1,200-$3,000 a year in PMI thereafter.