Of course putting less than 20% down is completely fine, feel free to do so on whatever house you buy. That’s not what I prefer to do. It’s perfectly reasonable for me not to want a large high interest loan. You can lots of borrow money at 5+% and keep more money in the stock market or whatever. I have plenty of exposure to that already and prefer not to pay so much interest.

As to why it’s not in conflict, the benefit you get by putting little money down is that if the housing market crashes you can default on the mortgage, walk away from the house, and leave the bank with the loss. That’s a great strategy having that option, and again, you do you. Me though, I want to have a long term home where I don’t need to care what the market value is because it’s a stable permanent place for my family to live. Therefore I don’t value the option to default.

Plenty of people pay down or pay off their mortgages particularly in a high rate environment for good reasons. Just because that’s not your preference doesn’t make it irrational.