How Much Deposit Do You Really Need With an Offer in Ontario?
The deposit is the good-faith money you hand over when your offer is accepted — it's part of your down payment, not an extra cost, but getting the amount and timing wrong can cost you the deal.
What the deposit is (and isn't)
The deposit is money you pay shortly after your offer is accepted, to show the seller you're serious and have something at stake. It is held in trust — usually by the seller's brokerage — and on closing day it's credited toward your purchase price. It is not a separate fee and it is not the seller's money to spend. It forms part of your down payment: if your down payment is $60,000 and your deposit was $20,000, you owe the remaining $40,000 at closing, plus closing costs.
There is no law in Ontario that fixes the deposit amount. It's negotiable, and it's written directly into your offer. That said, deposits are commonly a few percent of the purchase price, and they tend to be larger in competitive urban markets and on higher-priced homes, where sellers want stronger proof of commitment. On a new build, the builder's agreement sets its own deposit schedule, often staged in instalments, and it's usually less flexible.
How much should you offer?
Think about the deposit from the seller's side of the table. A seller comparing two similar offers reads the deposit as a signal: a buyer with substantial money already committed is less likely to walk away and more likely to be able to close. In a multiple-offer situation, a strong deposit can genuinely help your offer — it costs you nothing extra in the end, since the money goes toward the purchase anyway, as long as you actually close.
The limit is your own liquidity and your own certainty. Only offer a deposit you can actually produce on the deadline — it usually has to arrive by bank draft or wire, not a personal cheque — and only commit an amount you're prepared to have at risk if your own circumstances collapse. A very large deposit on an offer with shaky financing behind it is not confidence; it's exposure.
One more consideration: because the deposit is due almost immediately, it has to be accessible. Money locked in investments that take days to settle, or an RRSP withdrawal under the Home Buyers' Plan that hasn't been processed yet, may not be reachable in time. Keep the deposit portion of your funds liquid from the day you start making offers.
When it's due and where it goes
The standard Ontario offer form says the deposit is due within 24 hours of acceptance, unless the offer itself specifies something different. Some offers say "upon acceptance" or allow a set number of business days — whatever is written is what binds you, so read that line before you sign. Late deposits are a breach of the agreement, and sellers have, in some cases, treated a missed deposit deadline as grounds to terminate the deal. Treat the 24 hours as real.
The deposit is delivered to the listing brokerage and held in its trust account until closing. Get a receipt, and confirm it's been received. For condominium purchases from a builder, deposits are protected in trust by law. For freehold homes bought from a builder, Tarion's deposit protection covers a limited amount as of writing, which is one reason to read a builder's deposit schedule and total carefully before signing.
What happens to the deposit if things go wrong?
This is where the conditions in your offer earn their keep. If your offer is conditional — on financing, inspection, or a status certificate review — and a condition isn't satisfied despite your honest efforts, the deal is typically terminated and the deposit is returned to you in full. That's the protection conditions exist to provide.
If the deal is firm and you fail to close, the picture changes completely. The seller can treat the deposit as forfeited, and if they later sell the home for less than your price, they can sue you for the difference and their costs. A deposit can't simply be pocketed by one side while the other objects, though: releasing trust money generally requires a mutual release signed by both parties or a court order. Courts also have the power to grant relief from forfeiture in some circumstances. In plain terms: the deposit is genuinely at risk when a firm deal collapses because of you, disputes over it are slow and expensive, and neither outcome is something to gamble on casually.
The short version
- No legal minimum or set amount — it's negotiated and written into the offer.
- Commonly a few percent of the price; more in competitive situations.
- Usually due within 24 hours of acceptance, by bank draft or wire.
- Held in trust; applied to your price on closing.
- Refunded if a condition properly ends the deal; at real risk if a firm deal fails because of you.
Next step
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