08/19/2026
Deposit vs. Down Payment — Do you know the difference?
These two terms are often used interchangeably, but they are not the same thing!
🏡 Deposit: The money you provide with your offer as a commitment to the purchase. It is generally held in the brokerage’s trust account and credited toward the purchase price on closing.
🏡 Down payment: The total amount of money you are putting toward the purchase price rather than borrowing through your mortgage.
And yes — your deposit can form part of your down payment.
For example, if you’re purchasing an $800,000 home and your total down payment is $200,000, you might provide a $40,000 deposit with your offer. That $40,000 is part of the $200,000 — not an additional amount on top.
There are so many real estate terms that sound similar but have very different meanings. Understanding them can help you make better-informed decisions when buying a home.
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