GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
^
50% - Moderately

Down Payment


Synonyms:initial cash investment, initial payment, upfront portion
Filed Under: financial-banking, mortgages
Tags: banking, mortgage
 

Definition of down payment

down payment
1. A partial payment made at the time of purchase or when a loan originates with the balance to be paid later. First-time home buyers are allowed to put as little as 5% down when purchasing a property.

Related Terms and Acronyms:

  • cash back mortgage   A mortgage that provides the borrower a lump sum cash payment.
  • conventional mortgage   A mortgage that is not insured or guaranteed by CMHC or GE Capital.
  • high-ratio mortgage   A mortgage in which a borrower places a down payment of less than 20% of the purchase price.
  • Home Buyers' Plan (HBP)   A way for a homebuyer to use part of his or her RRSP as a down payment on a mortgage.
      ➥  Government assistance for first-time homebuyers.
  • low-down mortgages   Mortgages with a low down payment, usually less than 10 percent.
  • original principal balance   The amount borrowed.
  • pre-payment clause   A clause that stipulates the amount of principal a borrower may prepay ahead of schedule without penalty as well as the prepayment penalty for larger prepayments.
  • pre-payment penalty   A lender's charge to the borrower for paying off the loan before the end of the term.
  • trade equity   A swap of property, such as real estate or a car, as part of a down payment for other real estate.
  • zero down mortgage   A mortgage product that allows the borrower to financing 100% of their property.

More Related Terms and Acronyms

Search the Glossary

Mortgage Calculator
How does an adjustment in the size of your down payment change how much you'll end up paying for your new home? The difference can be staggering. Use our mortgage calculator and see how a simple change can save you tens of thousands of dollars.
Mortgage Calculator
 
Current Canadian Rates
For the best rate information in Canada, make use of our up to date interest rate comparison chart. Our brokers are not even remotely afraid of advertising our competitor's rates because we know how we stack up.
Best Current Rate Information
 
Mortgage Rates
Check out how we stack up against our competition and compare our mortgage rates.
Mortgage Rates