A down payment is the portion of a thing's cost that must be paid in advance in order to obtain financing and take possession of that thing.

Repayment of the balance of the note can be arranged along any scheme. The most common arrangement is a set number of payments at a set interval during which time the principal balance accrues interest. The accruing interest may be a fixed or variable rate and is most typically compounded (or calculated) monthly.

The amount that a seeker of credit is willing to put down on a purchase often determines the desirability of the terms of the loan. Lenders are more trusting of your ability to repay the loan when you demonstrate your own surety with a larger investment.

There are many tricks to purchasing houses with nothing down but the vast majority of house sales require a down payment of 5-20%.