Create separate cash buckets
A buyer can be approved for a mortgage and still be unprepared for the timing of the transaction. Create separate lines for the offer deposit, remaining down payment, land transfer tax, legal and registration expenses, adjustments, inspection or appraisal, insurance, moving, immediate work, and emergency reserve.
Do not count the same savings twice. If a deposit is delivered after acceptance, it generally becomes part of the buyer's total funds for closing, but it must be available according to the agreement rather than on the closing date.
Deposit: money needed early
The amount and delivery deadline are terms of the offer. Local expectations can vary with property type and competition. Ask how the funds must be delivered and confirm transfer limits or bank-draft timing before making an offer.
The deposit also has legal consequences if a transaction fails. A buyer should not assume it is automatically returned. Obtain legal advice for a default or dispute.
Down payment and financing cash
The required down payment depends on purchase price, occupancy, mortgage program, borrower circumstances, and lender requirements. The lender or mortgage professional should provide the actual minimum and explain mortgage insurance where applicable.
Proof of funds and the history of large deposits may be required. Organize account statements and discuss gifts, investments, transfers, business income, or funds from another sale early enough to resolve documentation questions.
Ontario land transfer tax and the first-time refund
Ontario land transfer tax is calculated from the purchase consideration and is normally handled through the buyer's lawyer at closing. The City of Toronto has an additional municipal land transfer tax, but Brampton, Georgetown, Milton, and Mississauga do not have Toronto's municipal tax.
Ontario states that an eligible first-time homebuyer may receive a refund of all or part of the provincial tax, up to $4,000, subject to its criteria. Eligibility rules can differ from federal first-time-buyer programs, so confirm the specific purchase with the lawyer.
Closing, adjustment, and move-in money
Budget for legal work, title insurance and registration disbursements, inspection, appraisal if required, home insurance, utility setup, and moving. The statement of adjustments may reimburse the seller for prepaid property tax, fuel, condominium fees, or other items depending on the transaction.
After closing, keep funds for locks, window coverings, basic repairs, appliances, moving overlap, and surprises. A useful target is not a universal percentage; it is a reserve based on the property's condition and the household's income stability.