Low mortgage rate vs. high downpayment: what to do? I'm in the happy position of having more than half the cash I need for a house on hand. I'm also in the unhappy position of having a low salary that will leave breaking even most of my life. Now I need to decide: 20% down, or 60% down (I have an emergency fund on the side that is not involved in this calculation).60% saves me a ton on mortgage interest. 20% down keeps cash on hand for investing. However, after tax savings, I calculate (maybe wrongly, please correct if so) that I would need to beat 4% interest a year with those savings just to break even. Now, since it compounds I could paint a rosy scenario where I do that easily. But with the current markets, just as likely to tank and stay there as they are to rise again, it seems like keeping from paying 5% on mortgage as a sure thing is a good use of the cash. Thoughts?March 25 2009 - Berkeley11YesReport a ProblemProblemSelect oneOffensive contentIrrelevant contentSpam (pure self-promotion)OtherDetailsYour emailPlease enter a valid email address.Submit CancelContent flaggedWe will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.We're sorry. This service is temporarily unavailable. Please come back later and try again.