Down payment
Names and abbreviations on this page
CFPB — Consumer Financial Protection Bureau. United States regulator for consumer financial products.
Housing terms & practical skills
What it means
A down payment is the part of a purchase price paid from the buyer's funds rather than financed through the main purchase loan. It is separate from closing costs. Required amounts and mortgage insurance depend on the loan program and other conditions.
Related skills
Calculate the shareRelate a cash amount to the purchase price.
Compare cash needsInclude closing costs and moving expenses.
Preserve flexibilityConsider the money remaining for foreseeable bills and repairs.
An everyday example
On a $200,000 purchase, a $20,000 down payment is 10 percent of the price. A simplified main loan amount would be $180,000 before any financed costs or other arrangements.
What to check
A larger down payment reduces the amount financed in a comparable transaction, but it also uses available cash. Compare the complete offers and remaining reserves.