Updated September 22, 2026. Educational only — not tax, legal, or lending advice. Confirm figures with your CPA, the state revenue department, and a lender before you close.

Down Payment Is What Keeps the Loan Inside the Appraisal

The down payment is the cash that makes loan amount divided by appraised value fit the lender’s maximum. AOPA’s September 11, 2026 leaseback article describes personal-use piston loans around 15–20% down, and a larger down payment when the aircraft will be leased back. A 10–25% band is an envelope, not your offer. Your offer is in a commitment letter.

Price and value are different

You agree to pay $400,000. The appraisal comes in at $360,000. The lender will advance 80% of the appraisal, which is $288,000. Your cash is $112,000, not 20% of $400,000. Twenty percent of the contract would have been $80,000 and would not close. Always compute cash as contract price minus maximum loan, and compute the loan from the appraisal. Do that in the calculator before you write a nonrefundable deposit.

Where the cash has to sit

Lenders want the down payment and several months of reserves in cash or marketable securities, not in home equity and not borrowed in a way you hid. Tax and the first insurance premium are due on top. If paying 20% empties the account, offer a structure you can survive or buy a cheaper airplane. A balloon does not replace a down payment. It replaces principal you did not pay during the term, and it comes back as a lump sum. See balloons.

Use changes the number

Training, rental, and leaseback are riskier collateral uses, so lenders ask for more cash. See fleet covenants. Experimental and older aircraft often need more cash because the advance rate is lower, not because a rule says “25%.”

Questions buyers actually ask

Talk with Jaken Aviation