What happens to my deposit when I buy a home in Ontario?

In Ontario, the deposit is a sum of money paid by the buyer shortly after the offer is accepted — typically within 24 hours or by the date specified in the agreement. It is held in trust by the listing brokerage (or, in some cases, the lawyer's trust account) until closing, when it is applied toward the purchase price.

The deposit demonstrates good faith and serves as partial security for the seller. If the deal closes, the deposit simply reduces what you need to pay at closing. If the deal falls apart while a condition is still outstanding and you exercise your right to terminate, you are entitled to a refund of the deposit.

However, if the deal goes firm (all conditions waived or met) and you then fail to close, the seller may be entitled to keep the deposit as damages — and could sue you for additional losses beyond the deposit amount. Always confirm when your deposit is due and ensure the funds are accessible; a late deposit can put your deal at risk.