A down payment in real estate is a sum of money paid upfront by the buyer when purchasing a property. It is typically a percentage of the property’s total purchase price. The down payment serves as an initial investment and demonstrates the buyer’s commitment to the transaction. It is used to reduce the amount of money that needs to be financed through a mortgage loan. A larger down payment can result in a lower loan amount and potentially lower monthly mortgage payments. The down payment is not refundable and is applied towards the purchase price of the property.