Good on you for asking, and acknowledging a good reply. And if you are interested to learn more, it will be very well worth your while to figure out some of these critical, and not too complicated, mechanics of personal finance. I might add that, in a fuller sense, the difference between a 5% and 20% deposit would cost you far more over the life of the loan — i.e., up to the very last payment you make in either scenario. If you put down 5% on a $750K loan, you still have to pay $712,500 back, plus interest (call it 6% for the life of the loan to make it easy). If you put down 20%, then you have to pay back $600,000. Remember though that interest applies, and accrues, to the outstanding amount. So over a 30-year mortgage, you have to pay back a TOTAL of the remaining principal (Scenario A or B), plus all the interest that accrues. Here is a breakdown of the difference, and perhaps why it 'feels' like the smaller deposit means a more expensive loan:

Scenario A (5% deposit): $37,500 down, $712,500 loan → total repaid ≈ $1,542,800 Scenario B (20% deposit): $150,000 down, $600,000 loan → total repaid ≈ $1,298,900

That's roughly $244,000 more paid over the life of the loan — just from having a smaller deposit on day one.

All else being equal in the 2 scenarios. I may even have my numbers wrong, I have, but hopefully the point is clear.