Ummm, you math is flawed.    I think you forgot the $7290 you would have to pay in mortgage insurance. 19% down payment, Mortgage = $412 290,  monthly payment $1886.16.  20% down payment, Mortgage = $400 000, monthly payment $1850.13.  So by keeping $5000 in you pocket it ends up costing you $7290 + $2160 = $9450 - $5000 (that you kept)  = $4450.  So keep five grand and spend an extra $4500...doesn't really make good money sense.  But if most people do math like you then thats why they can con you out of $4500 and have you smile like an idiot while taking your money.