You are here: Home Deposits Blog / All About House Deposits: FAQs and Help for Home Buyers 2022

All About House Deposits: FAQs and Help for Home Buyers 2022

all about house deposits faqs and help for home buyers 2022
Frequently Asked Questions about Home and House Deposits
What is a home or house deposit?

Much like a down payment guarantees the bank you’ll pay the mortgage, a house or home deposit guarantees the seller you’re serious about buying their property.

A house deposit is typically 5 - 10% of the purchase price of the property, and is a separate amount than the down payment on a home. These deposits are typically secured via a loan or cashier’s cheque, and also with cash equivalent deposit guarantees, like those offered by Home Deposits Now.

How much should my home deposit be in Canada in 2022?

Home or house deposits in Canada are usually between 5 - 10% of the property value, but there isn't a hard rule for what makes an adequate house deposit amount.

Canadians now have the all-new option of using a Home Deposits Now cash equivalent guarantee instead of making an offer to purchase a home with a traditional cash deposit.

Our insurers' 'A' grade guarantee backs up your commitment to buy, making it safe for the seller, and easy for the buyer.

Our fees start as a fraction of a percent of the deposit. For a quote, you can use our free Calculator.

What’s a house or home deposit vs a down payment?

A house or home deposit is essentially a down payment to the seller. Much like a down payment guarantees the bank you’ll pay your mortgage, a house or home deposit is a guarantee you’ll buy from the seller.

A house or home deposit is generally 5 - 10% of the value and a down payment is typically much more - up to 20%.

A key difference between the deposit and down payment is their purpose in securing the confidence of the seller and the mortgage lender, respectively, about your financial ability to own a home.

While a deposit tells the seller that you are determined to purchase the property, a down payment tells the bank about your capability to handle the mortgage expenses.

Now Canadians have the option of securing their home deposit via Home Deposit Now Guarantees - providing more flexibility and ease to an arduous process.

Is a larger house deposit better?

A larger house deposit makes more sense for home buyers in most situations.

A smaller house deposit can give the buyer more flexibility at the time of settlement, but in a hot housing market, a larger deposit often makes for a more competitive offer. Home Deposits Now allows you to make a larger deposit on multiple listings without having to release your funds, sell your assets, or take out loans through closing.

We help home buyers with equity, and can instantly unlock a larger deposit with Home Deposits Now to secure a larger deposit. As funds do not change hands until closing, buyers can keep earning returns on their house deposit money until the settlement date, and since guaranteed deposits are not loans, buyers need not worry about interest charges, applications, or even credit checks!

Is a deposit on a house refundable?

Not often.

When you’re buying a property in Canada, a deposit on your home is accompanied by an Agreement of Purchase and Sale (APS). When the deposit is paid and the APS is signed, you’re officially in a legally binding contract.

Now that the purchase has been processed, it is not a good idea to try and go back on your word - the seller may have grounds to sue. Unless you have put conditions on the deposit (i.e., for the sale to go through only if the seller agrees to fix a door or a fence on the property) and the conditions have not been met, your deposit can be returned after both parties sign a release form.

Read More from our Blog

why homeowners are using deposit guarantees when selling

8 MIN READ

Why Homeowners are Using Deposit Guarantees When Selling

A house Deposit Guarantee can be used as a substitute for a cash deposit which acts as the insurance that the buyer will pay the deposit on closing. Deposit Gua...

/images/Blog/aron_truax.jpg

Aron Truax, CMO

POSTED 07 July, 2022

5 things you need to know about house deposits in ontario 2022

7 MIN READ

5 Things You Need to Know About House Deposits in Ontario 20...

In 2022 house deposits can seem a little daunting at first, but we’re here to help!

/images/Blog/nathan_neyedly.jpg

Nathan Neyedly, Program Manager

POSTED 03 July, 2022

home deposits 101 can you borrow your house deposit

5 MIN READ

Home Deposits 101: Can You Borrow Your House Deposit?

When buying a home in Canada, the house deposit is usually between 5-10% of the purchase price of the property. Considering the current housing market, this is ...

/images/Blog/nathan_neyedly.jpg

Nathan Neyedly, Program Manager

POSTED 25 June, 2022

why should i use a deposit guarantee

8 MIN READ

Why Should I Use a Deposit Guarantee?

A house Deposit Guarantee can be used as a substitute for a cash deposit which acts as the insurance that the buyer will pay the deposit on closing. Deposit Gua...

/images/Blog/naresh_vyas.jpg

Naresh Vyas, VP Business Development

POSTED 22 June, 2022

everything you need to know about deposit guarantees

5 MIN READ

Everything You Need to Know about Deposit Guarantees

If you’re thinking about purchasing a house, property, or land, you probably already know that a cash deposit is required to guarantee the commitment of the buy...

/images/Blog/naresh_vyas.jpg

Naresh Vyas, VP Business Development

POSTED 21 June, 2022

home buyer help deposit guarantees

4 MIN READ

Home Buyer Help - Deposit Guarantees

Like the ones we offer here at Home Deposits Now, Deposit Guarantees first became popularized in Australia before coming to North America. Deposit Guarantees ar...

/images/Blog/annette_vais.jpg

Annette Vais, Business Dev. Manager

POSTED 15 June, 2022

why home buyers are leveraging deposit guarantees

3 MIN READ

Why Home Buyers are Leveraging Deposit Guarantees

When selling your house, you can state your preferred deposit amount and method in the listing. Deposit Guarantees have some massive advantages! Keep reading to...

/images/Blog/aron_truax.jpg

Aron Truax, CMO

POSTED 10 June, 2022

the next big thing in down payments on a house

5 MIN READ

The Next Big Thing in Down Payments On A House

For many, down payments on a house are the toughest part when it comes to buying a home. That, and qualifying for the mortgage.

/images/Blog/naresh_vyas.jpg

Naresh Vyas, VP Business Development

POSTED 05 June, 2022

home deposits 101 - canadian edition

8 MIN READ

Home Deposits 101 - Canadian Edition

Almost everyone has heard of a down payment when buying a house, but do you know about deposits? Many people confuse the two, but they’re very different! Here’s...

/images/Blog/nathan_neyedly.jpg

Nathan Neyedly, Program Manager

POSTED 01 June, 2022

how much is a house deposit in canada

3 MIN READ

How Much Is A House Deposit in Canada?

A house deposit, not to be confused with a down payment, is an offer of good faith which shows the seller that you are determined to purchase the property. To ...

/images/Blog/annette_vais.jpg

Annette Vais, Business Dev. Manager

POSTED 26 April, 2022