Mike: That depends on how much of a monthly payment you can comfortably afford (and qualify for when applying for a mortgage). For example if you paid full asking price on the property you're looking at (124.9) and 30 year fixed mortgage interest rates are at 5%...
a zero down mortgage would cost you $671 per month P&I.
With 3% down your payment would be $650.
With 10% down your payment would drop to $604 and if you
put 20% down your payment would be only $537.
These payments reflect P&I only and do not include taxes, insurance or PMI if applicable.
Even though your payments would be significantly less with the larger down payment, there is only a $130 difference between the 3% and 20% down payments.
What I would consider is what other investment(s) could I purchase with my money if I only put 3%, 5% or 10% down on this house and used the rest to invest in another asset.
For example, what if you bought a second house and used it as a rental property... generating positive cash flow, annual depreciation allowances, interest deductions and built up equity during ownership. run the numbers to see what provides the best return on your investment dollars.
If you have any questons or would like more information about this idea, please email me.