Down payment

The mortgage usually covers only part of the price. The rest, paid at closing from the buyer’s funds, is the down payment. A larger down payment generally means a smaller loan amount, but this page does not set a required share. Down payment is not the same as closing costs. Both can affect how much cash a buyer brings to closing.

Consumer glossaries define the down payment as the amount paid toward the purchase that is not financed. Loan-to-value and mortgage-insurance rules can depend on that amount, but those rules are not this definition.

Purchase, equity, and LTV discussions all start from how much of the price was borrowed versus paid up front.

Alex buys a home and pays part of the price in cash at closing. The mortgage covers the remainder. The cash portion of the price is the down payment; title fees are closing costs.

• Down-payment assistance
• Earnest money
• Equity
• Interested-party contributions
• Loan-to-value ratio
• Purchase price