Technically, it's the inability of the payer to pay the mortgage that causes market crashes. If you had an oracle that could predict with 99% certainty whether

Technically, it's the inability of the payer to pay the mortgage that causes market crashes. If you had an oracle that could predict with 99% certainty whether a given housebuyer would make a certain size of mortgage payments, you could afford to lend them that amount no matter the size of the down-payment, with a 1% risk premium over your interest rate. We don't have such an oracle, so we look for other signs. One of the signs of financial stability is the ability to pay a large fraction of the price in advance.