Blog > Deposit vs Down Payment in Ontario: What Each One Is, When It's Due, and Where It Goes
Deposit vs Down Payment in Ontario: What Each One Is, When It's Due, and Where It Goes
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The short answer
They are two different payments at two different times. The deposit is the smaller amount you deliver right after your offer is accepted, and it sits in a trust account until the deal closes or ends. The down payment is the larger amount you need on closing day, and it is simply the part of the price your lender is not financing. Your deposit is credited toward the purchase price when the deal closes, so it is not an extra cost. It is the first slice of what you were going to put down anyway.
The deposit: what it is and when it is due
The deposit is the money you put up to show the seller your offer is real. Nothing in Ontario law sets the amount. It is negotiated, and it is one of the terms a seller looks at when comparing offers.
The timing is set by your agreement of purchase and sale. On the standard OREA Agreement of Purchase and Sale, the box you tick decides it. If the agreement says the deposit is payable "Upon Acceptance", the form defines that as delivering the deposit to the deposit holder within 24 hours of the acceptance of this Agreement. That is a real deadline, and it usually lands on an evening or a weekend.
The same clause says the deposit is held in trust pending completion or other termination of the agreement, and is credited toward the purchase price on completion. It goes into the deposit holder's non-interest bearing real estate trust account, so it does not earn you interest unless your agreement specifically provides for that.
On the brokerage side, Ontario regulation gives the deposit holder five business days from receiving the money to get it into its real estate trust account. That is a separate clock from your 24 hours, and it does not extend your deadline.
The down payment: what it is and the minimums
The down payment is the portion of the purchase price you are covering yourself. The minimum is set federally and depends on the price of the home.
| Purchase price | Minimum down payment | Mortgage default insurance |
|---|---|---|
| $500,000 or less | 5% of the purchase price | Required if you put down less than 20% |
| Over $500,000, under $1.5 million | 5% of the first $500,000, plus 10% of the amount above $500,000 | Required if you put down less than 20% |
| $1.5 million or more | 20% of the purchase price | Not available. Insured mortgages are limited to homes priced below $1.5 million |
So on a $750,000 home, the minimum is 5% of the first $500,000 plus 10% of the remaining $250,000, which is $25,000 plus $25,000, or $50,000.
Two things people miss. The minimum down payment has to come from your own funds. And if you are putting down less than 20%, mortgage default insurance is part of the deal, which your lender will normally add to the mortgage rather than ask you to pay at closing. Your lender or mortgage broker is the one to confirm your actual numbers.
How the two connect on closing day
This is the part that trips buyers up. The deposit is not on top of the down payment. It comes off it.
Take a $600,000 purchase with the minimum down. That is 5% of the first $500,000, which is $25,000, plus 10% of the next $100,000, which is $10,000. Total down payment $35,000. If you put up a $20,000 deposit when your offer was accepted, that $20,000 is credited toward the price on closing, and your lawyer needs the remaining $15,000 from you, plus your closing costs, which are separate again.
A larger deposit does not reduce what you owe. It just moves more of your money earlier, and it means more of your own cash is committed while the deal is conditional.
Getting your deposit ready before you write an offer
Worth sorting out in advance
- Know exactly where the deposit money is sitting and how quickly you can move it. Twenty-four hours is not long if the funds are in an investment account with a settlement period.
- Ask who the deposit holder is and what form of payment they accept. Certified funds, a bank draft and a wire are not all handled the same way, and daily transfer limits are real.
- Confirm payment instructions by phone with the brokerage office, using a number you looked up yourself. Do not act on wire instructions that arrive only by email. Deposit fraud is the one mistake in this process that is very hard to undo.
- Expect identity and source of funds checks. They are a normal legal requirement in a real estate purchase, not a sign anything is wrong.
- If any of the money is a gift from family, tell your lender early. It affects how they document your down payment.
What happens to the deposit if the deal does not close
Once the money is in trust, the brokerage holding it cannot simply hand it back. Neither the brokerage nor your agent gets to decide who is entitled to it. The deposit can only be released on a mutual release or direction signed by all parties, or on a court order.
In practice, when a deal ends cleanly on a condition that was never satisfied, the parties sign a mutual release and the deposit goes back. When there is a disagreement about who is at fault, the money stays in trust until the parties agree or a court decides. That is exactly why the conditions in your offer matter, and why it is worth understanding how offer conditions work in Ontario before you sign anything. If a deal does fall apart, talk to a real estate lawyer rather than assuming the outcome.
The order it actually happens in
Offer accepted, deposit delivered within the time your agreement sets. Conditions worked through. Deal goes firm. Then, on closing, your lawyer collects the balance of your down payment and your closing costs, the deposit is credited toward the price, your lender advances the mortgage, and the keys change hands.
If you know your deposit number and your down payment number before you start looking, the offer stage gets a lot less stressful.
Want a second read on your numbers?
If you are buying anywhere between Brockville and Ottawa and want to work out what your deposit and down payment would actually look like on a specific price range, send me the details and I will walk you through it.
Sources: Financial Consumer Agency of Canada, "How much you need for a down payment"; CMHC homeowner mortgage loan insurance purchase program requirements; OREA Agreement of Purchase and Sale, Form 100 (revised 2022), deposit clause; Ontario Regulation 567/05 trust account requirements as explained by OREA. Reviewed September 2026. This is general information from a REALTOR, not legal, mortgage or tax advice. Confirm your own numbers with your lender and your real estate lawyer.