Proper 2BRs start at $500k in our neighborhood. We're looking at buying, but I'm leery of the $100k downpayment. It would reduce our savings to 50k liquid and 75k in retirement.
I can easily afford just putting down 5% and paying the extra interest rate and PMI. However, is this a smart thing to do? I have the nagging feeling that the extra $400/month or so is just being wasted. I would probably just put in extra principal each month to get it above 80% and then get rid of PMI and potentially refinance.
However, I balance that with the realities that low stock market returns (negative this year), bond yields, and money market yields mean that my brokerage account is not taking advantage of the extra savings.
TL;DR: $100k downpayment reduces liquid cash to 50k. Buy now with 20% down, buy now with 5-10% down and take a higher interest rate/PMI, or wait 2-3 years to save up another 75k liquid?