Down Payment

A down payment is the portion of a large purchase you pay from your own money up front, with borrowing covering the rest. Pay 100,000 on a 500,000 house and borrow 400,000, and the down payment is 100,000.

A larger down payment means borrowing less and lighter interest. It also attracts better loan terms and protects you from owing more than the property is worth if prices dip.

A smaller one gets you into a home sooner but raises the monthly repayment. When rates rise, that burden grows quickly and can squeeze everyday spending.

Because many countries cap borrowing through a loan-to-value limit, a minimum down payment is effectively mandatory — the structure requires saving 20-30% of the price beforehand.

The down payment is not the only cash needed. Transfer taxes, agent fees, registration and moving costs add several percent of the price. Only after counting those can you tell what is genuinely affordable.