Canadian Home Deposits Explained
In Canada, people often use deposit and down payment interchangeably, but they are different parts of buying a home. The deposit is paid shortly after an offer is accepted to show commitment to the purchase. The down payment is the total amount of the purchase price you contribute from your own funds when the sale completes. Your deposit is usually credited toward that down payment.
There is no single typical deposit amount for every Canadian home purchase. It is negotiated between the buyer and seller and depends on the property, local market conditions, purchase price, and offer terms. In Vancouver and other competitive markets, a deposit of about 5% of the purchase price is common, though the agreed amount can be lower or higher. Deposits are typically held in trust by the seller’s brokerage, lawyer, or notary until completion.
For an owner-occupied home, the minimum down payment rules generally work as follows:
- Homes up to $500,000: at least 5% down.
- Homes from $500,000 to $1.5 million: 5% of the first $500,000 plus 10% of the portion above $500,000.
- Homes above $1.5 million: at least 20% down.
For example, a $900,000 home requires a minimum down payment of $65,000: 5% of the first $500,000 ($25,000) and 10% of the remaining $400,000 ($40,000). A buyer can always make a larger down payment if it suits their financing and long-term plans.
When the down payment is less than 20%, mortgage loan insurance is generally required. This protects the lender and is added to, or paid alongside, the mortgage. Buyers should also plan separately for closing costs, such as legal fees, inspections, moving expenses, and applicable property transfer taxes. These costs are not normally included in the deposit or down payment.
Different lending rules can apply to rental or investment properties, self-employed buyers, and non-residents; a 20% down payment is often expected for non-owner-occupied purchases. Before making an offer, speak with a qualified mortgage professional and review the deposit deadline carefully. Clear planning helps buyers move forward with confidence and supports more informed decisions about housing and long-term value.
