Down Payment
& Deposit

Your down payment is the total amount of cash you are contributing toward the purchase of your home. It is paid on closing day — the day you take possession — and represents the portion of the purchase price that isn't covered by your mortgage.

The larger your down payment, the smaller your mortgage and the less you pay in interest over time. Down payments of 20% or more also eliminate the need for mortgage default insurance (CMHC insurance), which can save thousands.

The deposit is the amount of cash you provide upon accepted offer — typically within 24 hours of the seller signing back. It's your show of good faith, demonstrating to the seller that you're serious and financially committed.

In Toronto, a deposit of 5% of the purchase price is the standard expectation. The funds are held in the listing brokerage's trust account and kept there until closing day, at which point they are applied toward your total down payment.

Yes — the deposit counts as a portion of your down payment. You are not paying both a deposit and a full down payment separately. Here's how the math works in practice:

The $40,000 deposit sits in trust from offer acceptance through to closing. On possession day, it flows directly into the transaction as part of your down payment — you simply need to bring the remaining balance.

Canada's minimum down payment rules are set federally and are tiered based on purchase price. Here's what's required:

Technically, yes — but in Toronto, it's strongly not recommended. The 5% deposit has become the market standard, and sellers have come to expect it as a baseline signal of a serious, financially prepared buyer.

If cash flow is tight heading into the offer, talk to your Realtor before submitting. In some cases it's possible to negotiate a slightly longer deposit timeline (e.g. 48–72 hours rather than the standard 24), giving you a brief window to move funds — but the amount itself should stay at 5%.