Down payment
The cash you pay up front toward a home purchase.
Conventional mortgages often require 3-5% down minimum. Putting 20% down lets you avoid private mortgage insurance and lowers your monthly payment. Putting more down reduces total interest paid over the life of the loan.
Related
- PMI (Private Mortgage Insurance) — Insurance that protects the lender if you default — required when you put less than 20% down.
- LTV (Loan-to-Value) — Loan amount divided by home value, expressed as a percentage.