What is the typical down payment percentage required for conventional loans?

The typical down payment percentage required for conventional loans is often in the range of 5% to 20%. This range is significant because it aligns with the lending practices observed in many financial institutions offering conventional mortgage products.

A down payment of around 5% to 20% allows borrowers to secure a mortgage without needing to reach the more substantial thresholds often associated with government-backed loans or higher down payments that may be required under certain lending conditions. A 5% down payment can make homeownership more accessible for first-time buyers who may not have large savings. Meanwhile, down payments of 20% or more can help borrowers avoid private mortgage insurance (PMI), which is an additional cost when the down payment is less than 20%.

This flexibility in down payment options is crucial for many borrowers, as it provides various entry points into homeownership while also accommodating different financial situations.