Definition
The cash paid upfront when buying a home or car, with the rest borrowed. On homes, 20% down avoids private mortgage insurance, though many first-time buyers put down far less.
Why it matters
The down payment sets the loan size, the monthly payment, and whether PMI applies. It is most households' single largest savings goal, and where the money sits while it grows matters almost as much as the amount.
Example
On a $350,000 house, 20% down is $70,000. A couple saving $1,500 a month in a high-yield savings account reaches it in under four years, faster once interest is counted.
Put it into practice
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.