A gifted down payment must be acceptable to the lender, genuinely non-repayable when documented as a gift, traceable through bank records and available before the lender’s funding deadline.
Four points to remember
- A gift is not the same as a family loan; undisclosed repayment expectations can change qualification.
- The lender may require a signed gift letter and proof that funds reached the buyer’s account.
- Large transfers and foreign funds can require additional source-of-funds evidence.
- The buyer still needs enough verified cash for deposit, closing costs and reserves.
Decide whether the money is truly a gift
If the family expects repayment, the amount may be debt rather than a gift and could affect debt-service ratios. Everyone should use an accurate description and obtain legal or tax advice for any ownership or repayment arrangement.
- No hidden repayment agreement
- No undisclosed ownership promise
- Clear donor and recipient relationship
Prepare the lender’s document package
Requirements vary, but a lender may request its own gift-letter form, donor information, proof of deposit and account statements showing the transfer. The file should match the purchase agreement and amount used in the application.
- Signed lender gift letter
- Buyer bank statement
- Transfer or wire confirmation
Handle timing and foreign transfers early
Funds should arrive early enough to clear, be verified and remain available for closing. International transfers can involve additional anti-money-laundering, currency and account-history checks.
- Avoid unexplained cash deposits
- Keep original transfer records
- Allow time for compliance review
Calculate the complete cash requirement
A gift that covers the minimum down payment may still leave a shortage for the deposit, land transfer taxes, legal costs, adjustments or mortgage-insurance tax. Build a line-by-line closing budget.
- Deposit due with the offer
- Down payment due on closing
- Separate closing costs and reserve
Frequently asked questions
Do parents have to provide bank statements for a gift?
Requirements vary. Lenders commonly ask for evidence of the transfer and may request source-of-funds documents, especially for recent or international funds.
Can a gifted down payment be repaid later?
If repayment is expected, it should not be described as a non-repayable gift. The obligation must be disclosed and assessed.
Can the gift come from outside Canada?
It may be accepted, but extra transfer, source-of-funds and timing documentation is often required. Start well before closing.
Official sources and verification
This guide prioritizes primary information from governments, regulators and CMHC. Mortgage policies change; confirm the rules that apply when you apply.
This guide and its calculators are for general education only—not an approval, commitment, or legal, tax or investment advice. Actual rates, fees, underwriting and product terms vary by lender and application.