Family helping with the down payment? Here’s how to do it the way lenders want.
On an insured purchase, a gift from an immediate relative can cover up to 100% of your down payment — as long as the gift letter, the deposit timing, and the paper trail are done right.
Up to 100% gifted (insured)Immediate-family giftProper gift letterDeposit-timing handledNo repayment allowedFirst-time-buyer friendly
The ‘Bank of Mom and Dad’ is now one of the most common ways Canadians get into their first home — but a gift done the wrong way can stall your approval at the worst possible moment. Lenders have specific rules: the gift has to come from an immediate family member, it has to be a true gift with no repayment expected, and it has to land in your account and be documented before closing. Get the gift letter wording wrong, or transfer the money too late, and an otherwise-approved file can wobble. We set it up correctly from day one so the help your family is giving actually gets you the keys.
What you get
Why Canadians choose Mortgage Squad Advisors.
On insured purchases, a gift from an immediate relative can fund up to 100% of your down payment
Works beautifully alongside first-time-buyer programs (FHSA, RRSP Home Buyers’ Plan)
We provide the exact gift-letter wording lenders require — signed by the donor
Guidance on deposit timing so the funds are seasoned and traceable before closing
Clarity on who counts as ‘immediate family’ for each lender
Structure that keeps the gift a true gift — no repayment terms that would sink your ratios
Coordination if the gift comes from abroad, including the extra documentation lenders want
Pairs with as little as 5% down on insured purchases when the gift tops up your own savings
Plain-language walkthrough for the family member doing the gifting, too
All lender + broker fees disclosed in writing upfront
Maya · 24/7 AI advisor
Question about gifted down payment mortgage? Maya answers instantly in 50+ languages.
We confirm the donor is an eligible immediate family member and the purchase qualifies (owner-occupied insured purchases are the most flexible). We tell you up front how much of your down payment the gift can cover and how it interacts with any of your own savings or first-time-buyer programs.
2
Paper it correctly
We supply a gift letter with the wording lenders expect — donor name, relationship, amount, the property, and a clear statement that the funds are a gift with no repayment. The donor signs it. We also map the deposit timing so the money is in your account and documented well before closing.
3
Approve + close
With the gift documented and your income confirmed, we secure the approval and your lawyer closes. Because the paperwork was right from the start, the gift is a non-event in underwriting instead of a last-minute scramble.
Almost every lender restricts gifted down payments to an immediate family member — your parents, grandparents, children, or siblings. Some lenders flex to include other close relatives like aunts, uncles, or in-laws, and a handful will consider a long-term partner, but gifts from friends, employers, business partners, or anyone expecting something back are routinely declined. The reason is simple: the lender needs to know the money is genuinely yours to keep.
The single rule that matters most is that the gift has to be a true gift, not a disguised loan. If your donor expects repayment — even informally, even "whenever you can" — the lender treats it as debt, adds it to your liabilities, and your qualifying ratios suffer. With access to 100+ lenders and FSRA licence #13737, we confirm your specific donor is acceptable to the lender we are matching you with before you ever rely on the funds, so there are no surprises in underwriting.
What does a mortgage gift letter have to say?
A gift letter is a short document the lender requires every time gifted funds are used, and the wording is not optional. It must state the donor’s full name and their relationship to you, the exact gift amount, the property being purchased, and — most importantly — a clear declaration that the money is a genuine gift with no expectation of repayment and no interest in the property. Many lenders also want the donor’s contact details so they can verify it.
The letter has to be signed by the donor, not just by you. A missing signature, vague wording, or a letter that hints at repayment is one of the most common avoidable reasons a clean file stalls late in the process. We supply the exact wording your lender expects and walk your family member through signing it, so the gift becomes a non-event in underwriting rather than a last-minute scramble the week of closing.
How do I prove where the gifted funds came from?
Lenders do not just want to see the gift land in your account — they want to trace it. Expect to show the deposit hitting your account with a matching transfer record, and to provide bank statements; a 90-day account history often helps demonstrate the funds are seasoned and traceable. The cleaner the trail, the smoother underwriting goes.
Because we are a FINTRAC-reporting brokerage, source-of-funds documentation is part of how we work, not an afterthought. Canada’s anti-money-laundering rules mean every dollar of down payment needs a verifiable origin, and gifts attract particular attention. We tell you in advance exactly which statements, transfer confirmations, and donor records the lender will ask for, and we assemble them before the file is submitted — so the question of "where did this money come from" is already answered when an underwriter looks.
Can my down payment gift come from outside Canada?
Yes — and for newcomers it is one of the most common scenarios we handle. A gift from a parent or grandparent overseas is entirely acceptable, but lenders apply extra scrutiny because the funds originate outside the Canadian banking system. You will typically need to show a complete transfer trail: the money leaving the donor’s account abroad, any currency conversion, and the funds arriving in your Canadian account, with dates and amounts that reconcile.
Lenders may also ask for source-of-wealth evidence — proof of how your donor accumulated the money in the first place, such as sale documents or income records, sometimes translated. We serve clients in 50+ languages, so we coordinate directly with families abroad to gather the right paperwork and handle currency-conversion gaps before they become a closing-day problem. Prepared properly, an international gift is routine, not a roadblock.
Can a gift cover a 5%-down insured purchase and stack with the FHSA or HBP?
It can. On an insured, owner-occupied purchase, a gift from an immediate relative can fund your down payment right down to the 5% minimum — even the entire amount. The mortgage default insurance premium applies the same way it would if the money were your own savings; the gift simply replaces the cash you would otherwise have to accumulate.
Where it gets powerful is combining sources. Your own FHSA contributions and an RRSP Home Buyers’ Plan withdrawal can stack on top of a family gift to build a stronger down payment, reduce your insured premium, or simply get you into a home sooner. We model the mix for your specific purchase and disclose every lender and broker fee in writing upfront, so you see the full picture — what you bring, what your family gifts, and what it costs — before you commit.
FAQ
Common questions, answered.
Don’t see yours? Ask Maya — instant answer, any time.
Can my whole down payment be a gift?
On an insured, owner-occupied purchase, yes — a gift from an immediate family member can fund up to 100% of your down payment, even at the 5% minimum. The key conditions are that it’s a genuine gift (no repayment), it comes from an eligible relative, and it’s documented properly. For some non-insured or rental purchases lenders want you to have at least a portion of your own savings, which we’ll flag for your specific deal.
Who counts as ‘immediate family’?
Most lenders accept gifts from parents, grandparents, children, and siblings; many also accept other close relatives. Gifts from friends, employers, or anyone expecting repayment generally don’t qualify. Lender definitions vary slightly, so we confirm your specific donor is acceptable to the lender we’re using before you rely on the funds.
What exactly is a gift letter?
It’s a short signed document the lender requires, stating the donor’s name, their relationship to you, the gift amount, the property being purchased, and — crucially — that the money is a true gift with no expectation of repayment. We provide the wording; the donor just signs it. Wrong or missing wording is one of the most common avoidable hiccups, so we get it right the first time.
When does the money need to be in my account?
Lenders generally want to see the gifted funds in your account before closing, with a traceable transfer — often around 15 days ahead, though it varies. They’re confirming the money is really there and really yours. We map the timing to your closing date so the deposit is seasoned and documented when underwriting looks for it.
Does the gift affect my mortgage qualifying?
A genuine gift helps — it’s down payment, not debt, so it lowers the amount you need to borrow without adding a payment to your ratios. The danger is a ‘gift’ that’s secretly a loan: if repayment is expected, lenders treat it as debt and it can hurt your qualifying. That’s why the no-repayment statement in the gift letter matters.
Can the gift come from outside Canada?
Yes, gifts from family abroad are common, but lenders apply extra scrutiny to the source of funds for anti-money-laundering reasons. Expect to provide additional documentation showing where the money came from and a clear transfer trail. We prepare this in advance so an international gift doesn’t delay your closing.
Can I combine a gift with the FHSA or RRSP Home Buyers’ Plan?
Absolutely — and it’s a powerful combination for first-time buyers. Your own FHSA and RRSP HBP savings can stack with a family gift to build a stronger down payment, lower your insured premium, or simply get you in sooner. We’ll model the mix that works best for your purchase.
Does my family member take on any liability by gifting?
A true gift carries no ongoing liability — the donor isn’t on title or the mortgage, and isn’t responsible for the loan. If a family member instead wants to be on the mortgage to help you qualify, that’s a co-signing or guarantor arrangement, which is different and does carry obligations. We explain both so your family chooses with full information.
What if I’m a first-time buyer using a gift?
You’re in the most common scenario of all, and the most flexible. Insured first-time purchases allow fully gifted down payments and pair with every first-time program. Start with our first-time home buyer page for the full toolkit, and we’ll layer the gift in correctly.
