For the past several years, the Disney Vacation Club has required a minimum downpayment of 10% on all point purchases. Recent changes to the application of promotional incentives has reduced the initial cash outlay.
Previously the downpayment was a fixed 10% of the base price of the points being purchased. Promotional incentives were deducted from the balance due. A purchase of 160 vacation points at the base rate of $104 per point would require a minimum downpayment of $1,664 (160 x $104 x 10%) plus closing costs. Promotional discounts (currently $8 per point) would then be deducted from the remaining balance.
In the above example, the buyer would be required to pay $1,664 plus fees out of pocket with an additional $1.280 reduction coming as part of the incentive. The remaining balance of $13,696 could then be financed over as long as 10 years.
DVC has now changed the math for buyers at Disney's Animal Kingdom Villas. As part of the new calculation, the promotional incentives contribute to the downpayment. Using the above example, the $1,664 required downpayment is now being reduced by the $1,280 incentive. Including closing costs, a new member can finance a DVC purchase for as little as $500 out of pocket. The amount may be larger for purchases greater than 160 points.
Note that this revised calculation will result in a higher principle amount financed, high monthly payments and high total interest paid over the life of the loan.