Understanding the Difference Between a Deposit and a Down Payment in Canada

What’s the Difference Between a Deposit and a Down Payment?

When buying a home in Canada, you’ll often hear both “deposit” and “down payment” — and they aren’t the same thing.

• Deposit: Paid to the seller’s brokerage shortly after your offer is accepted (often within 24 hours).

• Down Payment: The total amount you contribute toward the purchase price at closing, which must meet your lender’s minimum requirements.

Does the Deposit Count Toward the Down Payment?

Yes — your deposit is part of your down payment.For example:

• You have $50,000 saved.

• You provide a $10,000 deposit when your offer is accepted.

• On closing day, you’ll provide the remaining $40,000 to your lawyer to complete your down payment.

• 
  

When Do You Pay the Down Payment?

Your deposit is paid right after your offer is accepted. The rest of your down payment is paid on the closing date, usually through your lawyer or notary.

Why This Matters for Your Budget

Your deposit money is tied up as soon as your offer is accepted, so be sure it’s accessible in a bank account — not locked away in an investment you can’t quickly cash out.