# Down Payment

*Real Estate — Finicade finance glossary*

A down payment is the cash you put in up front, with the mortgage covering the rest. Twenty percent is the threshold where US mortgage insurance falls away and pricing improves, but loans exist from 3% and government-backed programmes from zero. The trade-off is straightforward: a bigger deposit means lower payments and less risk of negative equity, at the cost of tying up cash you may need.

**Also known as:** deposit, downpayment, deposit on a house

**Related terms:** [Loan-to-Value Ratio (LTV)](https://finicade.com/glossary/loan-to-value-ratio), [Private Mortgage Insurance (PMI)](https://finicade.com/glossary/pmi), [Mortgage](https://finicade.com/glossary/mortgage), [Closing Costs](https://finicade.com/glossary/closing-costs), [Home Equity](https://finicade.com/glossary/home-equity)

Source: https://finicade.com/glossary/down-payment