How much deposit do I need to buy a home in Ontario, and who holds it?
Your deposit is usually 5% of the purchase price, though it can be more in a competitive offer. It's held in trust by the real estate brokerage, not paid to the seller, and it's credited toward your purchase price at closing.
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How much deposit is normal in the GTA?
There's no fixed legal amount. Market practice in the GTA runs around 5% of the purchase price, though buyers sometimes offer more, even 10%, to make an offer look stronger in a multiple-offer situation. The exact figure is negotiated and written into your Agreement of Purchase and Sale.
Who actually holds my deposit?
The real estate brokerage, not the seller and not your lawyer. Ontario law requires deposits to go into a segregated trust account, separate from the brokerage's own operating funds, under the Trust in Real Estate Services Act. For a pre-construction purchase, a builder's lawyer sometimes holds it in trust instead, depending on the agreement.
When is the deposit due?
Usually within 24 hours of the agreement becoming binding, though the exact deadline is set in the agreement itself. Missing that deadline can put the whole deal at risk, so arrange the funds before you make an offer, not after.
What happens to my deposit if the deal falls through?
Depends on why. If you cancel properly under a financing, inspection, or other condition before its deadline, your deposit is normally returned in full. If you walk away after conditions are satisfied or waived, the seller can claim against it, and possibly sue for more if their damages exceed the deposit.
What if the buyer and seller disagree about who gets it?
The brokerage generally cannot release a deposit without both sides signing a mutual release, a short document confirming the deal is off and where the money goes. If buyer and seller can't agree, the deposit stays frozen in trust until they settle, a court decides, or the brokerage applies to pay the funds into court and steps out of the dispute. This can take months, so getting legal advice early matters.
Where to go from here
- Confirm your deposit amount and due date in the agreement before you sign.
- Have the funds ready, ideally as a bank draft, before your offer goes in.
- If your deal is falling apart, get legal advice before signing anything releasing your deposit.
People also ask
Is my deposit separate from my down payment?
No. It's part of your down payment, credited against the price at closing. You bring the remaining balance on closing day.
Can the seller access my deposit before closing?
No. It stays in the brokerage's trust account until closing or until both sides agree otherwise in writing.
What is a mutual release?
A document both buyer and seller sign confirming the deal is off and stating what happens to the deposit. Without it, the funds generally stay frozen.
Is my deposit insured if the brokerage fails?
Yes. RECO's Consumer Deposit Insurance Program covers losses from a brokerage's fraud or insolvency up to $200,000 per claim (as of 2026), with a $4 million cap per event.
Sources
This page is general information about Ontario law as of September 2026. It isn't legal advice about your situation.