While a 3 percent down mortgage can make homeownership more accessible, it carries a few drawbacks. Because you’ll be providing a deposit of less than 20 percent, lenders will require that you pay for private mortgage insurance, which increases the monthly mortgage payments. In addition, with a smaller down payment, you’ll be starting out with less equity in the home. You’ll also be borrowing a greater amount of money, meaning you’ll have a bigger debt to repay. A more substantial debt will likely take longer to repay and cost you more in interest.