Understanding Down Payments (and Deposits) for First-Time Homebuyers
If you’re buying your first home, you’ve probably heard the terms deposit and down payment used like they mean the same thing — but they’re actually very different.
Deposit
Your deposit is the money you submit with your offer to show good faith. It’s typically due within 24 hours of an accepted offer. The deposit counts toward your total purchase price and becomes part of your down payment. (typically 5% of purchase price in the GTA)
Down Payment
Your down payment is the total amount you’re putting toward the home when you close. It’s what determines the size of your mortgage and whether you’ll need mortgage insurance.
For example, if you buy a $700,000 home with a $70,000 down payment, you’ll finance the remaining $630,000 through your mortgage.
How Much Do You Need?
In Canada, the minimum down payment depends on the purchase price:
• 5% on the first $500,000
• 10% on the amount above $500,000
• 20% if the price is $1 million or more
Why This Matters
Understanding these two payments early helps you plan your savings, make confident offers, and avoid surprises once your offer is accepted.
📍 Need help calculating your down payment or deposit?
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