(1.) The percentage of the purchase price that the buyer is to pay in cash, which they are not permitted to borrow from the lender. The larger the down payment, the smaller the mortgage loan, and therefore the smaller amount owed as installed monthly mortgage payments.

(2.) The difference between the value of the property and the loan amount, expressed in dollars, or as a percentage of the price.

• A borrower on a conventional loan should aim for a down payment that is at least 20% of the property's value.
• For example, if the house sells for $100,000 and the loan is for $80,000, the down payment is $20,000 or 20%.

For borrowers who cannot afford a high down payment, there are down payment assistance programs that function as a sort of third party mortgagor for the down payment required. There are both legal and illegal ways to obtain down payment assistance - Is Down Payment Assistance Legal?