What the number actually refers to
Twenty percent is the threshold at which conventional financing generally stops requiring mortgage insurance. That is what it buys. It is not a minimum to qualify, and it is not a rule that applies across every loan type.
Somewhere along the way a threshold for avoiding one cost turned into a widely repeated entry requirement, and it now keeps people renting while they save toward a number that was never the gate.
The trade being made
Putting less down means carrying mortgage insurance, and that is a genuine cost that belongs in the comparison. What it buys is time, an earlier purchase, at whatever the market is then, rather than at whatever it is after several more years of saving.
Neither side of that is automatically right. It depends on what the property costs, how long the saving would take, and what mortgage insurance would actually run on that file. It is a comparison, not a rule, and it is worth doing with real numbers rather than with a remembered percentage.
Where the number does not apply at all
Eligible veterans and active-duty service members have a VA loan available with no down payment requirement and no monthly mortgage insurance. Certain rural-area programmes also have no down payment requirement. Different loan types answer this question differently, which is why a single figure cannot be the answer for all of them.
These are consumer mortgages, and I originate them in select states. Outside those states I can introduce you to a licensed colleague.
How to find your own answer
The useful version of this question is not "is twenty percent required" but "what does each option cost me on this property". That comparison needs the property, the loan type and current guidelines, and it takes one conversation.
Eligibility, terms and mortgage-insurance costs vary by scenario, by loan type and by lender guidelines. Nothing here is a commitment to lend.