In short
It's commonly 1% to 5% of the price and is held in trust, usually by the listing brokerage.
Walk away from a firm deal without a valid reason and you could lose it, and possibly more.
How it works in Ontario
The deposit is the money a buyer puts up when an offer is accepted. On the standard Ontario Agreement of Purchase and Sale, the offer says whether it is paid "herewith" (with the offer) or "upon acceptance".
"Upon acceptance" is defined on the form as within 24 hours of the agreement being accepted. Most deposits today are sent by bank draft or electronic transfer, so have the funds ready before you sign.
At closing, the deposit is credited toward the purchase price. It counts as part of the money you bring to close.
Who holds the deposit?
The deposit goes to the "Deposit Holder" named in the agreement, which is usually the listing brokerage. It must be held in trust until the deal closes or ends.
Unless the agreement says otherwise, the standard form says the deposit sits in a non-interest-bearing real estate trust account, so no interest is earned or paid on it.
Deliver the deposit exactly as the agreement says, on time, and keep proof of payment. A late deposit can put the buyer in breach of the agreement.
How much is a typical deposit?
There is no legal minimum. In practice, deposits are often around 1% to 5% of the price, and they tend to be higher in competitive markets.
A larger deposit can signal commitment, but it is also more money at risk if you can't close.
Some buyers in competitive situations offer a larger deposit to help their offer stand out, as long as the funds are truly available.
When can you lose it?
If a firm deal falls apart because the buyer fails to close without a valid legal reason, the seller may claim the deposit and may also sue for further losses.
If a deal ends properly, for example on an unmet condition, the deposit is normally returned. The brokerage will usually want both buyer and seller to sign a release, or a court order, before it pays the money out.
Common questions about deposit
How much deposit do you need to buy a house in Ontario?
There is no set amount; the deposit is whatever the buyer offers and the seller accepts. Deposits are commonly in the range of 1% to 5% of the price. A bigger deposit can strengthen an offer, but it is more money at risk if you can't close.
When is the deposit due on an accepted offer in Ontario?
If the offer says "upon acceptance", the deposit is due within 24 hours of acceptance under the standard Ontario form. If it says "herewith", it is delivered with the offer. Check your agreement and have the funds ready before you sign.
Who holds the deposit when you buy a house?
The deposit is usually held in trust by the listing brokerage, named in the agreement as the Deposit Holder. Under the standard form it sits in a non-interest-bearing trust account until closing, when it is credited to the purchase price.
Do you get your deposit back if the deal falls through?
It depends on why the deal ended. If a condition isn't met, the agreement normally says the deposit is returned, though the brokerage usually wants a signed mutual release first. If a buyer simply fails to close a firm deal, they can lose the deposit and face a claim for more.
Sources
General information for Ontario, updated October 2026. Not legal, tax or mortgage advice. Rules change, so confirm with your lawyer, lender or the source above before you rely on it.