What is the typical down payment percentage for conventional loans?

The typical down payment percentage for conventional loans is often considered to be 20%. This percentage is significant because it allows borrowers to avoid private mortgage insurance (PMI), which is an additional cost required when the down payment is less than 20%. A conventional loan, not insured or guaranteed by the federal government, typically reflects this higher down payment standard to indicate a lower risk for lenders. While loans with lower down payments, such as 5% or even 3%, are available, they often come with additional requirements or costs, such as PMI. Therefore, the 20% down payment is viewed as the "standard" in conventional financing, making it the correct choice in this context.