What Is a Deposit Surety Bond? How Canadian Buyers Can Keep Their Cash and Still Make the Offer

The deposit's job is to protect the seller. It doesn't have to be your cash doing it.

Your offer gets accepted on a Tuesday night. By Wednesday, the deposit is due, and in Ontario that usually means within 24 hours. For a lot of buyers the money isn't sitting in a chequing account. It's in the house they haven't sold yet, in an RRSP, or in investments they'd rather not sell in a hurry. A deposit surety bond is a way to make that promise to the seller without handing over the cash.

We think the deposit question has been asked the wrong way for a long time. Every guide tells you how much to put down and where it's held. Almost none ask why it has to be cash at all.

What a deposit actually does in a Canadian home purchase

A deposit is a good-faith payment that shows the seller you're serious. In Ontario it is usually around 5% of the purchase price, delivered within 24 hours of an accepted offer and held in the listing brokerage's trust account under the Trust in Real Estate Services Act (TRESA) until closing. In British Columbia, the BC Financial Services Authority (BCFSA) cites 5% to 10% as typical and notes that any amount can be negotiated.

On closing day, the deposit is credited toward the purchase price. Until then, it sits. If the deal collapses, it stays in trust until the buyer and seller agree in writing to release it, or a court or arbitrator directs where it goes.

So the deposit does one job: it gives the seller something to claim if the buyer doesn't close. Hold on to that, because it's the whole reason a deposit surety bond can do the same work.

How much cash does a deposit tie up?

More than most buyers plan for, and at the worst possible moment.

The national average home price was $668,219 in August 2026, according to the Canadian Real Estate Association (CREA). A 5% deposit on that price comes to about $33,411. That is a modelled figure built from those two inputs, not a number CREA reports.

Now set it against the minimum down payment. On a home priced between $500,000 and $1.5 million, the minimum is 5% of the first $500,000 plus 10% of the portion above it. On $668,219 that works out to about $41,822 (modelled: $25,000 plus 10% of $168,219). The deposit alone is roughly 80% of that buyer's minimum down payment, and it's due within a day of acceptance, long before the mortgage funds.

For a move-up buyer the squeeze is tighter. Their down payment is usually equity in the home they're selling, and that equity isn't available until their own sale closes. The usual fixes all cost something: drawing on a line of credit, arranging a bridge loan, or selling investments on someone else's timeline.

What is a deposit surety bond?

A deposit surety bond is a bond backed by an insurer that takes the place of all or part of a buyer's cash deposit. Instead of cash sitting in a trust account, the seller holds the bond. If the buyer doesn't close, the seller can claim on the bond, after a claim review, up to the bond amount.

The idea isn't new. Similar surety bonds, known there as deposit bonds, are commonly used in Australia as an alternative to a cash deposit, and Canadian condominium developers already rely on surety products such as condominium deposit insurance to secure buyers' deposits. What has been missing in Canadian resale is a simple version built for the buyer.

Here's the part people miss. A deposit surety bond does not make the buyer's obligation disappear. If the seller is paid on the bond, the buyer repays the bond issuer as agreed. A deposit surety bond frees up your cash. It does not remove your responsibility to close.

Who does a deposit surety bond protect?

The seller. That is the point of it. The seller gets a bond backed by an insurer in place of cash in a trust account, and pays nothing for it.

The buyer's benefit is different, and we want to be clear about it. You keep your savings available for the down payment, closing costs and the move. You do not get protection from your own default.

How DepositGuard Surety works

DepositGuard Surety is SecureMyOffer's deposit surety bond for home buyers, underwritten by Accelerant Insurance Company of Canada. Getting one takes four steps.

1. Quote. About a minute. You don't need to give a name, an address or a credit check to see a price.
2. Apply. About five minutes: a soft credit check, one document and one pledged asset.
3. Approved. Usually within one business day. You receive a contract number that's good for 120 days on any offer.
4. Accepted. Once the deal is firm, the listing agent accepts the bond online. No account needed.

The pledged asset can be an RRSP or TFSA, investments, a GIC or savings, or home equity. Nothing moves and you keep using it. The soft credit check does not affect your credit score.

DepositGuard is open to Canadian citizens and permanent residents buying a home anywhere in Canada except Quebec, including new builds and pre-construction. The bond can range from $10,000 to $250,000, up to 10% of the purchase price.

Want to see what happens to a cash deposit when a deal falls apart? We walk through every scenario in Deal Fell Through? What Happens to Your Deposit in Canada.

What does a deposit surety bond cost?

Nothing until the seller's side accepts it. There is no charge at the quote, at approval, or when the deal goes firm. You are charged once, when the seller's side accepts.

The rate depends on your credit range and what you can verify, and proving your income and savings brings it down. As an example only: a buyer with good credit and verified income and savings, bonding $10,000 at 1%, pays $100 plus a $150 policy fee, for one charge of $250 plus tax. Your own quote shows your actual price.

Weigh that single charge against what the alternatives cost you in interest, fees, or investments sold before you planned to.

What should you check before relying on a deposit surety bond?

Three things, and none of them are complicated.

First, the seller's side has to accept a bond in place of cash. Some sellers may refuse a non-cash deposit, so talk it through with your real estate agent before you write the offer.

Second, read the repayment terms. If you don't close and the seller is paid on the bond, you repay as agreed. A deposit surety bond is not a way out of a firm deal.

Third, line up the timing. Your approval is good for 120 days, so get approved when you're actively writing offers rather than months ahead.

Frequently asked questions

Is a deposit surety bond the same as a cash deposit?

No. A cash deposit is your money held in a trust account until closing. A deposit surety bond is a bond backed by an insurer that the seller can claim on if you don't close, so your cash stays with you.

Does a deposit surety bond protect the buyer?

No, it protects the seller. The buyer's benefit is liquidity: your savings stay available for closing. If the seller is paid on the bond, you repay as agreed.

Will applying for DepositGuard Surety hurt my credit?

No. The application uses a soft credit check, which does not affect your credit score, and you can see a quote without any credit check at all.

Can I use a deposit surety bond on a new build?

Yes. DepositGuard Surety is available for resale homes, new builds and pre-construction purchases anywhere in Canada except Quebec.

When do I pay for a deposit surety bond?

Once, when the seller's side accepts it. Nothing is charged at the quote, at approval, or when the deal goes firm.

The bottom line on deposit surety bonds

The cash deposit has always been a stand-in for a promise. A deposit surety bond keeps that promise to the seller with an insurer's backing, while your savings stay where you need them for closing day. It won't let you walk away from a firm deal, and it isn't meant to.

If your down payment is tied up in your current home, your RRSP or your investments, see what a deposit surety bond would cost you. Get a DepositGuard Surety quote in about a minute at securemyoffer.com/surety.

A deposit's job is to protect the seller, and a deposit surety bond does that job without locking up your cash.

DepositGuard Surety is underwritten by Accelerant Insurance Company of Canada. Not available in Quebec. Prices shown are examples; each quote shows the actual price.