Jumbo Loan With 10% Down: I Paid PMI at 0.35% to Buy $1.6M Home Without Waiting 2 Years to Save 20%

When my husband and I started looking at homes in Denver’s Cherry Creek neighborhood in late 2023, we quickly realized that $1.6 million was the entry point for the 4-bedroom homes we needed for our growing family.

Our financial situation:

• Combined income: $420,000/year
• Savings: $220,000 (enough for 10% down + closing + reserves)
• Credit scores: 724 (me), 738 (husband)
• Current housing: Renting townhome at $3,800/month

The math:

• 20% down on $1.6M = $320,000
• We had only $220,000 saved
• Shortfall: $100,000

Our options:

1. Wait 2 more years to save additional $100,000 for 20% down
2. Buy a cheaper home under $1.1M where our $220,000 = 20% down
3. Find a jumbo lender accepting 10% down with mortgage insurance

Most people told us: “Jumbo loans require 20% down. You’ll have to wait or buy cheaper.”

What we discovered: Some portfolio lenders offer jumbo mortgages with 10% down plus jumbo PMI.

Here’s our complete story—how we bought a $1.6M home with 10% down, what jumbo PMI costs us, and whether buying now versus waiting 2 years to save 20% down made financial sense.

Understanding Jumbo Loans With Less Than 20% Down

The Traditional Jumbo Requirement: 20% Down

Standard jumbo underwriting:

• 20% down payment minimum ($320,000 on $1.6M home)
• No mortgage insurance required
• Credit score 700+ (720+ for best rates)
• DTI under 43%
• 6-12 months reserves

This is what 80% of jumbo lenders require—20% down, period.

The Alternative: Jumbo PMI Programs

Some portfolio and specialized lenders offer:

• 10-15% down payment options
• Jumbo mortgage insurance (PMI) to protect lender
• Slightly higher rates (0.125-0.25% premium)
• Otherwise similar qualification requirements

Jumbo PMI vs. Conventional PMI:

Key insight: Jumbo PMI rates are actually lower than conventional PMI (0.35% vs. 0.50%+) but monthly cost is higher due to larger loan amounts.

Finding a Lender

Of 8 jumbo lenders we contacted:

• 5 required 20% down (no exceptions)
• 2 offered 15% down with jumbo PMI
• 1 offered 10% down with jumbo PMI (higher credit requirements)

We found our lender through Browse Lenders which connected us with a portfolio lender specializing in low-down jumbo loans.

Not widely advertised—you have to ask specifically about jumbo PMI programs.

Our 10% Down Jumbo Loan Qualification

Our Financial Profile

Combined income: $420,000/year ($35,000/month gross)

Credit scores: 724 (me), 738 (husband)—lender used my lower 724 score for rate pricing

Down payment saved: $220,000 (enough for 10% + closing + reserves)

Monthly debts:

• Two car payments: $1,150/month combined
• Student loans: $875/month
• Credit cards: $0 (paid in full monthly)
• Total debt: $2,025/month

Home we wanted:

• Purchase price: $1,600,000
• Location: Denver (Cherry Creek)
• Loan needed: $1,440,000 (10% down)

Loan Terms We Received

Jumbo loan with 10% down + PMI:

• Purchase price: $1,600,000
• Down payment (10%): $160,000
• Loan amount: $1,440,000
• Interest rate: 7.125% (vs. 6.875% with 20% down)
• Jumbo PMI: 0.35% annually = $420/month
• Loan term: 30 years fixed

Monthly payment breakdown:

• Principal & interest: $9,695
• Jumbo PMI: $420/month
• Property taxes: $1,467/month (about 1.1% annually in Denver)
• Insurance: $265/month
• Total monthly payment: $11,847

Debt-to-income ratio:

• Monthly gross income: $35,000
• Total monthly obligations: $11,847 housing + $2,025 debt = $13,872
• DTI: 39.6%

Qualified comfortably under 43% DTI limit.

Closing costs: $45,000 (about 2.8% of purchase—slightly higher for jumbo)

Total cash needed: $160,000 down + $45,000 closing = $205,000

Reserves remaining: $220,000 - $205,000 = $15,000 cash + $48,000 accessible in retirement accounts = $63,000 total (about 5.3 months reserves)

The Alternative: 20% Down (If We Waited 2 Years)

To accumulate $320,000 for 20% down:

• Current savings: $220,000
• Need to save: $100,000 more
• Monthly savings rate: $4,200/month (after covering $3,800 rent and expenses)
• Time to save $100,000: 24 months

20% down loan terms (projected):

• Purchase price: $1,600,000 (assuming no appreciation during wait—unrealistic)
• Down payment (20%): $320,000
• Loan amount: $1,280,000
• Interest rate: 6.875% (better rate with 20% down)
• No PMI required
• Monthly P&I: $8,420
• Taxes + insurance: $1,732
• Total monthly payment: $10,152

Payment comparison:

• 10% down payment today: $11,847/month
• 20% down payment in 2 years: $10,152/month
• Difference: $1,695/month

But this assumes home price stays at $1.6M—which was unrealistic in Denver’s market.

The Real Analysis: Denver Market Appreciation

Market Context

Denver Cherry Creek appreciation (2023-2024): 6-8% annually

Conservative estimate: 6% annual appreciation over 2 years = 12.36% cumulative

Projected home price in 2 years: $1,600,000 × 1.1236 = $1,797,760

20% down on $1.798M: $359,552 (vs. $320,000 on $1.6M price)

Now we need to save: $359,552 - $220,000 = $139,552 (not just $100,000)

At $4,200/month savings rate: 33 months (not 24 months)

And this assumes 6% appreciation—if appreciation continued at 8%, we’d never catch up saving $4,200/month while prices rose $128,000/year.

Full Financial Comparison: Buy Now vs. Wait 2 Years

Option 1: Buy now with 10% down at $1.6M

Initial costs:

• Down payment: $160,000
• Closing: $45,000
• Total: $205,000

Monthly payment: $11,847 (including $420 PMI)

2-year total costs:

• Initial costs: $205,000
• 24 monthly payments: $11,847 × 24 = $284,328
• Total spent: $489,328

Equity after 2 years:

• Principal paydown: $64,200
• Home appreciation (6% annually): $197,760 (home now worth $1,797,760)
• Total equity: $261,960

Net cost: $489,328 - $261,960 = $227,368

Option 2: Wait 2 years, buy at $1.798M with 20% down

2 years of renting:

• Rent: $3,800/month × 24 = $91,200
• Annual rent increases (5%): add $4,560
• Total rent: $95,760

Purchase at higher price:

• Purchase price: $1,797,760
• Down payment (20%): $359,552
• Closing: $50,943
• Total cash needed: $410,495

We’d need to save: $410,495 - $220,000 = $190,495 over 2 years

At $4,200/month: We could only save $100,800 over 2 years

Shortfall: $89,695 (we still wouldn’t have 20% down after 2 years)

Even if we scraped together 20% down:

Loan amount: $1,438,208

Monthly payment at 6.50% (assuming rates drop): $9,085 P&I + $1,647 taxes + $296 insurance = $11,028/month

Total costs over first 2 years of ownership (Years 3-4 from today):

• Rent paid (Years 1-2): $95,760
• Down payment + closing: $410,495
• 24 monthly payments: $11,028 × 24 = $264,672
• Total spent: $770,927

Equity after Year 4 (2 years of ownership):

• Principal paydown: $71,400
• Home appreciation (another 6% over 2 years): $224,570
• Total equity: $295,970

Net cost over 4 years: $770,927 - $295,970 = $474,957

Comparison:

Buy now with 10% down:

• Net cost after 2 years: $227,368
• Own home immediately
• Building equity from day one

Wait 2 years for 20% down:

• Net cost after 2 years: $95,760 (rent only, no equity)
• After 4 years total (2 years ownership): $474,957 net cost
• Lost 2 years of appreciation ($197,760)
• Paid $95,760 rent with no equity

Buying now with 10% down saved us approximately $247,589 over 4 years compared to waiting.

What Jumbo PMI Actually Costs Us

Current PMI Payment

Jumbo PMI rate: 0.35% annually

Loan amount: $1,440,000

Annual PMI: $1,440,000 × 0.35% = $5,040

Monthly PMI: $420

PMI Elimination Plan

Jumbo PMI drops when we reach 75-80% LTV (depending on lender—ours requires 75%).

To hit 75% LTV:

Option 1: Pay down to 75% LTV

Original home value: $1,600,000 × 75% = $1,200,000 max loan

Current loan balance: $1,440,000

Need to pay down: $240,000 (unrealistic for us)

Option 2: Appreciation to 75% LTV

Current loan balance: $1,440,000

Home value needed: $1,440,000 ÷ 75% = $1,920,000

Required appreciation: $320,000 (20% appreciation from $1.6M purchase price)

At 6% annual appreciation: 3.3 years to reach 20% appreciation

Option 3: Combination of paydown + appreciation

After 3 years:

• Loan balance: $1,376,000 (paid down $64,000)
• Home value (6% annual): $1,906,000 (19.1% appreciation)
• LTV: $1,376,000 ÷ $1,906,000 = 72.1%

PMI drops after 3 years

Total PMI paid: $420/month × 36 months = $15,120

Was PMI Worth It?

PMI cost over 3 years: $15,120

Alternative (waiting 2 years for 20% down):

• Rent paid: $95,760
• Lost appreciation: $197,760
• Total opportunity cost: $293,520

Savings by buying now despite PMI: $293,520 - $15,120 = $278,400

Absolutely worth paying PMI to buy now instead of waiting.

Our Current Situation (18 Months Later)

Home value today: $1,760,000 (10% appreciation in 18 months)

Loan balance: $1,408,000 (paid down $32,000)

Current equity: $352,000 (22%)

Current LTV: 80%

PMI status: Still paying $420/month (need to hit 75% LTV for removal)

Projected PMI elimination: 12-18 more months (when home hits $1.88M or we prepay principal)

Total PMI paid so far: $420 × 18 = $7,560

Wealth created: $352,000 equity (from $160,000 initial investment + $7,560 PMI + principal paydown)

If we’d waited to save 20% down:

• Still renting (paid $68,400 more in rent)
• Missed $160,000 appreciation
• Total opportunity cost: $228,400

Buying with 10% down + PMI was clearly the right decision.

Who Should Consider Jumbo Loans With 10-15% Down?

Ideal Candidates for Low-Down Jumbo + PMI

✅ High income but limited savings (young professionals, dual-income couples)
✅ Strong credit scores (720+ for best jumbo PMI terms)
✅ Appreciating markets (6%+ annual appreciation)
✅ Currently renting (rent comparable to or higher than mortgage payment)
✅ Plan to stay 5+ years (time to build equity and eliminate PMI)
✅ Confident income growth (can prepay or refinance to eliminate PMI faster)

When 20% Down Makes More Sense

✅ You’re 6-12 months away from 20% down (short wait, minimal opportunity cost)
✅ Market is stable or declining (no urgency to buy)
✅ You already own (not paying rent while saving)
✅ Jumbo PMI unavailable in your area (limited lender options)
✅ Your DTI is tight (can’t afford extra $300-700/month PMI)

The Bottom Line

We bought a $1.6M home with 10% down ($160,000) and pay $420/month jumbo PMI.

Alternative was waiting 2 years to save 20% down—which would’ve cost us:

• $95,760 in rent
• $197,760 in lost appreciation
• Total opportunity cost: $293,520

Compared to:

• $15,120 total PMI cost over 3 years (until elimination)
• Net savings: $278,400 by buying now with 10% down

Our advice:

Buy With 10-15% Down + Jumbo PMI If:

✅ Market is appreciating 5%+ annually
✅ You’re paying high rent ($3,000+/month)
✅ You have 720+ credit and strong income
✅ Waiting 2+ years to save 20% down
✅ You can afford $300-700/month PMI

Wait for 20% Down If:

✅ Market is flat or declining
✅ You’re close to 20% down (under 12 months away)
✅ You already own (not paying rent)
✅ Your DTI can’t support PMI payment
✅ Jumbo PMI not available in your area

Check your credit score to ensure you meet 720+ minimum for best jumbo PMI rates.

Connect with portfolio lenders who offer jumbo PMI programs—not all jumbo lenders provide this option.

For us, buying with 10% down and paying $420/month PMI beat waiting 2 years by over $278,000.

In appreciating markets, time is more valuable than avoiding PMI.