One of the biggest draws of pre-construction is that you don’t pay the full down payment on day one. Instead, you follow a deposit schedule set out in your agreement. Understanding that schedule, and how your money is protected, is one of the most important parts of buying well.
How a deposit schedule works
A deposit schedule spreads your payments over time, usually through post-dated cheques or bank drafts given to the builder’s lawyer, who holds the funds in trust. A missed deposit can be a default under the agreement, so treat the schedule as non-negotiable once you sign.
Typical condo deposit structures
In the GTA, pre-construction condo deposits are commonly 15% to 20% of the purchase price, split into several payments. A traditional 20% example:
| Payment | Timing | Amount |
|---|---|---|
| Deposit 1 | On signing | 5% (often less a fixed initial cheque) |
| Deposit 2 | 30 days | 5% |
| Deposit 3 | 90–180 days | 5% |
| Deposit 4 | At occupancy or a set later date | 5% |
In slower markets, builders often offer extended schedules, for example a small amount on signing with the rest spread over two or three years, or a lower total such as 10% to 15%. Projects listed in platinum access often come with better terms than public launch pricing.
Typical freehold and townhome deposits
Freehold homes and many townhomes use fixed dollar amounts instead of percentages, for example $25,000 to $50,000 instalments at set intervals. The total often lands around 10% to 15% of the price. Browse current townhomes to compare terms between builders.
Deposits outside Ontario
In British Columbia and Alberta, pre-sale deposits are also commonly held in trust, with totals often between 10% and 20%. BC buyers of new condos get a seven-day rescission period after receiving the disclosure statement. Read our Edmonton, Calgary and Vancouver city guides for local context.
How your deposits are protected
- Trust: in Ontario, condo deposits must be held in trust or secured by deposit insurance under the Condominium Act.
- Tarion: Ontario’s warranty program protects up to $20,000 on condos, and up to $60,000 or 10% (to a maximum of $100,000) on freehold homes. Details in our Tarion guide.
- Interest: the Condominium Act requires interest on condo deposits held in trust, at a prescribed rate, usually paid or credited at occupancy. Freehold agreements may not include interest unless negotiated.
The deposit isn’t your full down payment
Your lender may require a larger down payment at closing than the deposits you’ve paid, especially for investment properties or if the appraisal comes in below the price. Plan for this early. Our mortgage pre-approval guide covers lender requirements, and closing costs explains the other cash you’ll need.
Tips for negotiating better deposit terms
- Ask whether an extended schedule is available, especially in a slower market.
- Ask for a portion to be due at occupancy instead of early.
- If you’re buying several units or through a VIP program, ask for reduced deposits.
- Get every concession in writing in the agreement or an amendment.
Our guide on negotiating pre-construction prices has more ideas.
What if you can’t pay a deposit?
Talk to the builder early. Some builders will agree to adjust timing, but they’re not obliged to. If you won’t be able to close, an assignment sale may let you exit without losing your deposits. Defaulting can mean losing your deposits and facing a claim for the builder’s losses.
Frequently asked questions
Can I use a line of credit for deposits?
You can, but lenders may ask where your down payment came from at closing, and borrowed funds can affect how much mortgage you qualify for. Discuss it with your lender first.
Do I get my deposit back if the project is cancelled?
Generally yes. Agreements set out the terms, and in Ontario trust rules and Tarion protection apply to the limits above.
Is the deposit applied to the purchase price?
Yes. All deposits are credited toward the purchase price at closing.
General information only. Deposit terms depend on your agreement; have a real estate lawyer review it before you sign.
