# Bank Statement Loan 5 Down vs 10 Down Payment Options

- Author: TrueBankFlow (https://truebankflow.com)
- Published: 2026-10-17
- Category: Bank statement loan programs
- Canonical: https://truebankflow.com/blog/bank-statement-loan-5-down-payment-options

> Which programs offer a bank statement loan with 5 down or 10 down, the credit and reserve trade-offs, and why low down payment files price higher.
A bank statement loan with 5 down exists, but only a few non-QM lenders offer it, usually for a primary home, a strong credit score and a modest loan amount. Ten percent down is far more widely available. The extra 5 percent buys a lower rate, a lower credit floor, fewer reserve months and a longer list of lenders.

## Which lenders offer a bank statement loan with 5 down?

A 5 percent down bank statement loan comes from a short list of non-QM lenders, and each one limits it to a narrow borrower profile. Ten percent down is the common floor across the market. A broker should expect to find the 95 percent option on one or two lender matrices, not on most.

### Where the 95 percent tier shows up

Non-QM lenders publish their programs as matrices: a grid of credit score bands, loan amounts and maximum loan-to-value (LTV) ratios. LTV is the loan amount divided by the purchase price or appraised value, whichever is lower. A 5 percent down payment means a 95 percent LTV. On most matrices the top LTV for a bank statement loan is 90 percent, and the 95 percent cell appears only where the investor behind the lender has chosen to buy that risk.

When the cell exists, it tends to carry several conditions at once:

- **Primary residence only.** Second homes and rentals stop at a lower LTV.
- **Purchase only.** A refinance to 95 percent is rare.
- **A one-unit property.** Two to four units and many condos sit lower.
- **A high credit score floor.** The next section covers the bands.
- **A loan amount cap**, often well under the program's maximum.

### How to find the lenders that write it

The quickest way is a lender matrix of your own: one row per lender, one column per program feature, updated when a rate sheet changes. Max LTV by occupancy is a column worth keeping current, because investors raise and cut the top tier more often than any other term. The method for building that matrix, and the other columns that separate lenders, is in the guide to [how brokers place bank statement loans](/blog/bank-statement-loans-broker-guide).

A borrower who can document income on tax returns, or who fits government lending, may have better low down payment choices outside non-QM. An FHA loan, for example, allows a smaller down payment than most bank statement matrices, and [how FHA treats bank statements for self-employed borrowers](/blog/fha-bank-statement-loan) explains when that path works.

## Credit score floors on 5 down and 10 down bank statement mortgages

Credit score floors climb as the down payment shrinks. A 10 down bank statement loan often opens to scores in the high 600s, while a 5 down bank statement mortgage usually needs a score in the 700s. The exact bands belong to each lender, so read the matrix for the file in hand.

### Why the floor moves

The down payment is the lender's cushion if the borrower defaults and the home is sold. At 95 percent LTV that cushion is thin, so the lender wants other evidence that default is unlikely. Credit history is the most direct evidence it has. A high score at a low down payment balances the risk, and a lender that lowers both would be stacking two weak points in one file.

### What the bands look like

The table below is an example of how a lender might set its bands. The figures are illustrative and do not come from any lender's matrix.

| Example credit band | Example max LTV, purchase, primary home |
| --- | --- |
| 760 and above | 95% |
| 720 to 759 | 90% |
| 680 to 719 | 90% |
| 660 to 679 | 85% |
| 620 to 659 | 80% |

Read it from the borrower's middle score. A borrower at 745 cannot reach 95 percent on this grid, even though the program offers it. Raising the score to 760 opens the tier. A borrower at 690 can put 10 percent down but not 5.

### Scores near a band edge

When a borrower sits a few points under a band, a rapid rescore or a paid-down card balance can move them up before the lender pulls credit again. That is worth checking before you tell a borrower 5 percent down is off the table. It is not worth promising, because the score after a rescore is not known in advance.

## Reserve months behind a low down payment bank statement file

Reserves are the cash a borrower still holds after closing, counted in months of the new housing payment. A low down payment bank statement file usually needs more reserve months than a 10 down file. The lender wants the borrower to survive a slow quarter without missing a payment.

### How reserves are counted

Reserves are measured against the full monthly payment: principal, interest, taxes, insurance and any association dues. Eligible sources are usually checking, savings, and part of retirement and brokerage balances, verified from statements. Money used for the down payment and closing costs does not count, because it is gone at closing.

### Why the 5 down borrower faces a harder test

The low down payment borrower often chose 5 percent because cash is short. The lender then asks for six or more months of reserves on top of the down payment, where a 10 down file might need three or four. A borrower with $40,000 in the bank may find that 10 percent down plus four months of reserves fits, while 5 percent down plus nine months does not. Check the reserve rule on the same matrix row as the LTV, because the two are set together.

### Business funds as reserves

Many self-employed borrowers keep most of their cash in a business account. Lenders vary on whether business funds count as reserves and how much of the balance they will allow. Some require a letter or an analysis showing the withdrawal will not harm the business. Raise this early, since a reserve shortfall found in underwriting is a late and painful surprise.

## Why does a 5 down bank statement mortgage price higher than 10 down?

A 5 down bank statement mortgage prices higher because the lender and its investor carry more loss in a default and fewer lenders compete for the loan. The rate sheet shows this as an LTV adjustment. The step from 90 to 95 percent is usually one of the largest on the sheet.

### Loss severity drives the step

At 90 percent LTV, a lender that forecloses has 10 percent of the price, plus any appreciation, to absorb selling costs and missed payments. At 95 percent it has half that. Agent commissions, transfer taxes and repairs before a sale can consume most of that. An investor buying the loan prices that thinner cushion into the rate it will pay for.

### Less competition, less pressure on price

A tier that only a few lenders offer has less competition. When ten lenders quote a 90 percent file, a broker can shop the best one. When two lenders quote a 95 percent file, the price is whatever those two set.

### Mortgage insurance is not the usual offset

Conventional loans above 80 percent LTV typically carry private mortgage insurance, which shifts part of the risk to an insurer. Non-QM bank statement loans generally do not use mortgage insurance, so the lender prices the full risk into the rate instead. That is one reason the step from 10 down to 5 down looks steeper on a non-QM sheet than on an agency one. Ask each lender how it handles the risk, since a program can differ.

## Loan amount caps on a 95 percent bank statement loan

A 95 percent bank statement loan almost always has a lower loan amount cap than the program as a whole. A lender that writes bank statement loans to $3 million at 80 percent LTV may cap the 95 percent tier at a fraction of that. Larger loans at high LTV carry the most dollars at risk.

### How the cap interacts with price

The cap is a hard edge. A borrower buying at $700,000 with 5 percent down needs a $665,000 loan. If the lender caps the 95 percent tier at $650,000, the borrower must bring $50,000 down, about 7 percent. The loan still sits in the 90.01 to 95 percent LTV band on most rate sheets, so the larger down payment fixes the cap without lowering the price.

### When the purchase is above the conforming limit

Once the loan amount passes the conforming limit, the file enters jumbo territory, where lenders ask for more reserves and often a second appraisal. Very few programs combine a jumbo loan amount with 5 percent down. The rules for that size of file are covered in [jumbo bank statement loans and their reserve tiers](/blog/jumbo-bank-statement-loans).

## When a 10 down bank statement loan beats stretching to 5 down

A 10 down bank statement loan is often the better deal when the extra down payment lowers the rate enough to pay itself back, or when stretching to 5 percent leaves the borrower thin on reserves. The choice is a calculation on the borrower's own numbers, not a rule of thumb.

### A worked example on one purchase

The comparison below uses one borrower and a $500,000 purchase. All rates are examples to show the method, not quotes.

| Example figure | 5 percent down | 10 percent down |
| --- | --- | --- |
| Purchase price | $500,000 | $500,000 |
| Down payment | $25,000 | $50,000 |
| Loan amount | $475,000 | $450,000 |
| Example rate, 30 year fixed | 8.25% | 7.75% |
| Principal and interest | $3,568.52 | $3,223.86 |
| Monthly difference | | $344.66 lower |

The extra $25,000 at closing lowers the payment by about $345 a month in this example. Divide $25,000 by $344.66 and the break-even point is roughly 73 months, a little over six years. A borrower who plans to keep the loan longer than that comes out ahead with 10 percent down. A borrower who expects to sell or refinance in three years may be better served by the smaller down payment, provided the reserves still clear.

### Signs the borrower should put more down or wait

- The 5 percent option needs reserves that would empty the business account.
- The credit score is a few points under the 95 percent band, and a rescore is uncertain.
- The loan amount sits just over the cap for the 95 percent tier.
- The borrower's deposits are falling month to month, which makes the income figure fragile at any LTV.

Falling deposits deserve a closer look before any quote. [TrueBankFlow](/) lines up twelve or twenty-four months of statements and shows whether deposits are rising or falling, which tells you early whether the income figure will hold.

### Sharing the analysis while you shop

Quoting a 95 percent file often means sending the same deposit analysis to two or three lenders. Before you pass a borrower's statements and income work to several parties, check what that analysis is under federal credit reporting law. [Whether bank statement analysis counts as a consumer report](/blog/is-bank-statement-analysis-a-consumer-report) covers the question a broker should settle first.