Deposit vs Down Payment: What Alberta Buyers Should Know

Deposit vs Down Payment: What Alberta Buyers Should Know

Many first-time buyers confuse the deposit with the down payment, but they serve two different purposes in Alberta real estate.

What Is a Deposit?
A deposit is the amount you give after your offer is accepted. It shows good faith and commitment to the purchase.
• typically paid within 2–3 business days
• held in trust (not given to the seller directly)
• usually ranges from $5,000–$20,000 depending on price and competition
• applied toward your down payment at closing

What Is a Down Payment?
A down payment is the total amount you must contribute toward the purchase before your mortgage is funded.
Minimums set by the federal government:
• 5% on the first $500,000
• 10% on the portion between $500,000–$999,999
• 20% for homes over $1M

How They Work Together
The deposit is simply an early portion of the down payment you already owe.
For example:
If your down payment is $25,000 and you gave a $10,000 deposit, you owe the remaining $15,000 on closing.

If you’re looking for a REALTOR® who makes the buying process easier to understand, I’d love to help you along the way.