<prompt> Human: Rent in my area is extremely high were paying 1200month on a 650sqft house. Weve been looking for a new place to rent for 6 months or so, however are unable to find anything cheaper My wife and I have a baby on the way, are settled in our careers and want to purchase a home in the next year or so. Problem is we dont have enough for a 20 deposit. I know the general rule of thumb is to wait until you have the 20 deposit, but is the rule that way so that you dont take on PMI? or are there other negatives to not putting 20 down.I consider myself rather handy, and have a lot of family members who work in the trades. If im currently paying 1200month to rent, I could purchase a 100k house, for 90-95k, and take on PMI, mortgagecalculator.org says my payments would be 600month. I understand these calculations are relative general, and Id have to get actual numbers from a mortgage agency. That being said, I would save more money per month taking the PMI than i could renting, which I could then roll into the mortgage to decrease my principle until it hit 20 of value, in which I could then request PMI be removed, correct? Sorry for the formatting I dont post a whole lot.  <response>: Its not ideal, but the world wont come to an end if you dont put 20 down! You have less flexibility if the market dips and suddenly your house is under water. The mortgage payment isnt reflective of the actual monthly costs of owning a house. Factor in routine maintenance, PMI, higher utilities, etc. You need a bigger emergency fund in case something really big happens. 