Down Payment and Deposit

What does down payment mean?

The down payment of your purchase is how much cash you are paying on the day of possession.

What is the deposit?

The deposit is the amount of cash that you provide upon accepted offer. In Toronto this is usually a minimum of 5%. The deposit stays in the listing brokerage’s trust account until closing day when the remainder of your dow payment is due.

Does the deposit count as a portion of your deposit or is separate?

The deposit does count as a portion as a portion of your down payment. If you are paying a 20% down payment on closing and you give a 5% deposit upon an accepted offer then you will only need to provide the remaining 15% on closing.

What is the minimum deposit required?

The minimum deposit in Canada is 5% on the first $500,000 of the purchase price.

The minimum deposit on a purchase price of $500,000 to $999,999 is:

5% on the first 500k and 10% on the portion between 500k and $999,999.

The minimum requirement for any property over $1,000,000 is 20%.

Do I have to give 5% as my deposit or can I provide less?

In Toronto it is strongly recommended to offer at least 5% to the purchase price. It is an extremely competitive market and sellers have come to expect 5% as the deposit amount. Anything less than 5% could signal a red flag to the sellers and weaken the offer substantially.