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

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