down payment

A down payment is the money you bring to the table. The lender covers the rest, and the size of your contribution changes everything that follows.

A larger down payment means a smaller loan, which means less interest across the whole term, which means the house costs you less in the end. It can also earn you a better rate, because a lender exposed to less risk charges less for carrying it.

In Nigeria the deposits demanded are frequently substantial, sometimes thirty percent or more, and that is the wall most aspiring buyers hit. Not the monthly repayment, which people fix on, but the enormous single sum required before anything begins.

Which means the down payment is a savings problem long before it is a borrowing problem, and it should be treated like one. Work out the number, divide by the months you have, and move that amount automatically every single month into a money market fund where it can earn while it waits.

And resist the temptation to borrow your deposit. A person who borrows the down payment is carrying two debts into a house they could not afford, and the arithmetic of that rarely ends kindly.