Down payment

A down payment is the portion of a purchase price you pay upfront instead of borrowing. The remainder is financed, so a larger down payment means a smaller loan and normally less interest overall.

It can also affect whether a lender approves the purchase and on what terms, and the typical size and the rules around it vary by country and by lender. People often stretch to buy sooner with a small down payment and underestimate what that costs over the life of the loan.