0% down higher interest vs 5% down + PMI lower interest

[Olga B.]

Hi everyone!

I am currently purchasing a single family home to occupy and eventually rent out. 

The main reason behind purchasing a single family was the ability to get a first time home-buyer loan for 30 years fixed.

The bank I am working with offers 0% down with no PMI but a 4.875% interest rate.

Another option I am entertaining is going with a conventional 4% rate with 5% down and PMI. (The funds are available for 5% down)

1st option end up with high monthly payments but more cash left in my pocket. 

2nd option leaves me with a lower monthly payment but less cash in my pocket. The difference between the two is about $40 a month. (5% down being the lower payment)

The trouble I am having is which one would benefit me more as a rental when I decide to move on (and potentially invest into more RE). 

Thought I would reach out to the wise folks down at bigger pockets and pick your brains!

Thanks!