Deposit vs Down Payment in 2026: The Numbers, Worked Through

Buyer Advice Dave Dubbin August 7, 2026

A deposit and a down payment are not two separate piles of money. The deposit is the part you hand over first, usually within about 24 hours of your offer being accepted, to show the seller you are serious. The down payment is the total equity you bring on closing day, and the deposit counts toward it. Two different jobs, two different deadlines, one pool of money. We wrote a plain language explainer on this a while back, so today we are doing the 2026 version with actual numbers, because the numbers are where buyers get surprised.

Lining up a purchase this fall? Start your search here or ask us what deposits are actually looking like in this market.

House keys and contract

Photo: Unsplash

Two jobs, two deadlines

The deposit moves fast. In the GTA it is typically wired or delivered as a certified cheque within 24 hours of acceptance, and it sits in the listing brokerage's trust account until closing. Nobody spends it. It is held in trust, and under most standard agreements it earns interest for you.

The down payment moves slowly. The rest of your equity flows through your lawyer on closing day, alongside land transfer tax, legal fees and the other closing costs. If your budget treats the deposit and the down payment as two separate bills, you are double counting. If it treats them as one bill with two due dates, you have it right.

The 2026 minimum down payment rules

As of August 2026 the federal minimums work like this. You need 5 per cent of the first $500,000 of the price, 10 per cent of anything between $500,000 and $1.5 million, and a full 20 per cent once the price reaches $1.5 million. Anything under 20 per cent down means an insured mortgage, and the price cap for insured mortgages has been $1.5 million since December 2024. Eligible first time buyers and buyers of new construction can also stretch an insured mortgage over 30 years instead of 25, which trims the monthly payment but adds interest over the life of the loan.

The worked example: a $700,000 condo

Say you offer $700,000 on a two bedroom condo and the seller accepts. Here is how the money actually moves.

Item	Amount
Purchase price	$700,000
Deposit at 5 per cent, due within about 24 hours of acceptance	$35,000
Minimum down payment (5 per cent of $500,000 plus 10 per cent of $200,000)	$45,000
Deposit already paid, counted toward that minimum	$35,000
Equity still owed on closing day	$10,000
Mortgage before insurance	$655,000
Default insurance premium at 4 per cent, added to the mortgage	About $26,200
Ontario sales tax on that premium, due in cash at closing	About $2,100

Figures rounded. The premium rate comes from CMHC's published schedule for down payments between 5 and 9.99 per cent. Land transfer tax and legal fees are on top.

Run the same math at $1.2 million and the shape changes. The minimum down payment is $95,000, which works out to about 7.9 per cent of the price, while a conventional 5 per cent deposit is $60,000. Notice the deposit no longer covers the whole minimum. The other $35,000 has to be sitting ready for closing day.

Sorting out the money side of a purchase? These three pair well with this one:

How big should a deposit be

Toronto convention sits around 5 per cent, but nothing in law fixes that number. In a bidding war, a bigger deposit signals strength. In a softer market, and August 2026 qualifies as one, buyers have more room to negotiate it down. Two practical notes from our side of the table. First, only promise what you can produce in 24 hours. Money locked in a GIC or mid transfer between accounts does not count. Second, think about opportunity cost, meaning the return that money could earn elsewhere. A deposit sits in trust from acceptance until closing, so on a long closing that is months of your money working for the deal instead of for you, offset only partly by trust account interest.

When a deposit is at risk

If your offer is conditional and a condition fails, financing or the status certificate review for example, the deal dies and the deposit comes back. If you go firm and then refuse to close, the deposit is very much at risk, and Ontario courts have ordered buyers to forfeit deposits and cover seller losses beyond them. We are realtors, not lawyers. If you are anywhere near that situation, talk to a real estate lawyer before you sign anything or walk anywhere.

The bottom line

Deposit: fast money, roughly 5 per cent, ready within a day, held in trust. Down payment: closing money, minimums set by the price tiers above, deposit included in the total. Map both before you offer and closing day becomes paperwork instead of panic.