The deposit is money paid under the purchase contract as a sign of commitment; the down payment is the buyer’s total equity contribution toward the purchase price at completion.

Deposit

The amount, timing and holder are set out in the contract. It may form part of the eventual down payment if the transaction completes.

Down payment

The total amount the buyer contributes toward the purchase price rather than financing through the mortgage.

Why buyers confuse them

Both involve cash, but they occur at different stages and have different legal/financing roles.

EXAMPLE  If a buyer plans a 10% down payment on a $700,000 purchase, the total down payment is $70,000. A $35,000 contract deposit would generally be credited toward that total at completion.

The Key Difference

The deposit is part of the purchase contract and is paid according to the contract's timing and terms. If the transaction completes, it is normally credited toward the purchase funds. The down payment is the buyer's total equity contribution toward the purchase price, usually funded at completion together with mortgage proceeds and other closing funds.

The deposit can therefore be part of the down payment without being the same thing as the down payment. Buyers should know where the deposit money will come from, when it must be available, how it will be held, and what the contract says about it.

Related Nuhaven Guides

Mortgage Pre-Approval: What It Does—and What It Does Not Do

Understanding Subjects in a BC Offer

BC Home Buyer Rescission Period

Last reviewed: August 24, 2026

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