What "down payment" means in finance

A down payment is a payment made at the beginning of a purchase of an asset or property to reduce the total amount borrowed or financed. It is the initial upfront payment that a borrower or buyer pays to the seller or lender when acquiring a new asset, typically a home or a car. The down payment is usually expressed as a percentage of the total purchase price and can vary depending on the type of asset and the borrower's creditworthiness. The higher the down payment, the lower the loan or mortgage amount and the interest rate charged.