down paymentdown payment
(plural down payments)
- (law) A payment representing a fraction of the price of something being purchased, made to secure the right to continue making payments towards that purchase.
- By extension, any initial commitment signifying an intention to carry out a larger future commitment, even though no legal rights or obligations are secured.
down payment - Investment & Finance Definition
An upfront payment that is made on an item that will be paid for over time, such as a house or a car. The down payment reduces the amount of money that needs to be borrowed, and thus decreases the monthly payment. For homes, typically down payments are equal to at least ten percent of the purchase price of a house; however, in some circumstances the down payment may be less.