Comparing
the costs By
Michael D. Larson • Bankrate.com
The
overall costs differ broadly between a conventional mortgage and
low-down payment financing or an 80-10-10 loan. Here is the breakdown,
based on a $125,000 purchase on a 30-year-loan.
Down
payment
Average
interest rate
Monthly
principal
and interest payment
Total
PMI premium
Total
interest
over life
of the loan
Total
costs over conventional mortgage
(before tax)
Conventional
mortgage
$25,000
6.55
percent
$635
$0
$128,730
Total of
costs: $128,730
0
3% down
payment financing
$3,750
6.925
percent
$801
$6,477
$166,959
Total of
costs: $173,436
$44,706
80-10-10
loan
First
mortgage
$12,500
6.55
percent
$635
$0
$128,730
15-year
home equity loan
(with final balloon payment of $9,987)
