What's The Downside of Putting Less Than 20% on A Home?
The Ramsey Show Highlights
Ramsey Network
4.5 • 839 Ratings
🗓️ 10 January 2026
⏱️ 10 minutes
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| 0:00.0 | Brought to you by the Every Dollar app. Start budgeting for free today. My fiance and I just got |
| 0:08.0 | engaged and we're looking to buy our first home. And I was trying to understand the, so basically |
| 0:14.5 | we have the ability to put 20% down on the home. But based off of, you know, all the math behind |
| 0:20.2 | the numbers, I've seen it seems more optimal to possibly put down less and have more liquid cash available to invest, call it maybe 10% down with having the extra cash able to invest long term and say VU or QQQ or like a large cap ETF or index fund. |
| 0:36.2 | But what if you get your thoughts on it? |
| 0:38.3 | It's not optimal. |
| 0:39.3 | Your formula left out something called risk, |
| 0:42.3 | and it left out something towards good nights' sleep when your home is steady. |
| 0:47.3 | We studied 10,167 millionaires. |
| 0:51.3 | 89% of them were first-generation rich, meaning they started where you are and became |
| 0:57.2 | wealthy. |
| 0:58.1 | The number of them that said we were, we optimized our home mortgage by putting as little |
| 1:03.2 | down as possible to invest and became a millionaire that way, the number of them out of |
| 1:09.2 | 10,000 that said that was precisely zero. |
| 1:12.9 | No one does that in the real world. |
| 1:14.7 | That's a mathematical theory that doesn't hold water. |
| 1:17.1 | And the reason it doesn't hold water is you have not risk adjusted mathematically |
| 1:20.7 | because you're adding risk to your life. |
| 1:23.4 | So the typical millionaire, when they hit their first million dollars in net worth, |
| 1:27.3 | have an $800,000 paid for house and a $700,000 or $800,000 401k, |
| 1:32.5 | and they were sitting on a million and a half, and their house is paid for. |
| 1:36.1 | And that's the typical millionaire. |
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