Definition, Meaning & Synonyms

down-payment

Noun

/ˈdaʊn peɪmənt/

Definition

A down-payment is an initial payment made when purchasing a significant item, such as a house or a car. It represents a portion of the total cost upfront and is usually paid in cash.

Examples

She made a down-payment on her first home last year.
The down-payment for the car was 20% of its total price.
Many banks require a substantial down-payment for mortgage approvals.

Meaning

The term ‘down-payment’ refers to the amount of money that a buyer pays at the outset of a purchase. It reduces the amount that needs to be financed through a loan.