The traditional down payment is 20% because that's the threshold above which PMI is not required. However, many loan programs allow much less: conventional loans down to 3%, FHA to 3.5%, and VA/USDA to 0%.

A larger down payment means a smaller loan, lower monthly payment, less total interest over time, and more equity from day one.

The median first-time homebuyer down payment in the US is around 8% — well below 20%. Don't let the 20% myth keep you from buying if you have steady income and good credit.