15% down at 5.125% OR 25% down at 4.875%?

Hi everyone,

First time home buyer here and I am seeking advice for choosing the loan option I currently have three options. The property is $620,000 and the rate I locked was 15% down at 5.125% and 25% down at 4.875%. I am financially comfortable doing either option. My lender suggested doing Option A because the total rate of return holistically. But it is hard to wrap my head around especially in this current volatile market. So would love your advice!

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Option A : 15% ($93,000) down at 5.125% with PMI $50. Monthly mortgage around $4,050

Refinance (which will cost ~$10,000) when the rate goes down. Lender told me the rate will most likely drop within the next year and equity will go up so it will automatically drop PMI. And invest my left over savings in something else that has a better rate of return.

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Option B : 19% ($117,800) DOWN AT 5.125% with PMI $50 but pay lumpsum 1% ($6,200) right after closing so my LTV is 20% and PMI drops. Monthly mortgage $3,907

Then same as option A, refinance when the rate goes down and invest left over money into something like index fund.

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Option C : 25% (155,000) down at 4.875%. Monthly mortgage $3,583

Then refinance when the rate goes down even more. definitely have much less left over savings than Option A& B to invest.

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My question is, is it worth paying $476 monthly to wait for the rate to go down (which is unknown), refinance ($10,000), and drop PMI (which is extra work on me) and invest more money on something else? Or do more traditional way to do 25% down?

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Let me know

thank you!

submitted by /u/mangoyam00
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source https://www.reddit.com/r/RealEstate/comments/wum4ur/15_down_at_5125_or_25_down_at_4875/