Many first-time buyers in Canada get help from family with the down payment. A gift can be used, but lenders and mortgage insurers want to know exactly where the money came from and that it never has to be paid back. This guide is for buyers receiving a gift and the relatives giving one. It is not about borrowed down payments, which follow different rules.
Is a gifted down payment allowed?
Yes, within limits. For insured (high-ratio) mortgages, CMHC lists "a non-repayable financial gift from a relative" as a traditional down payment source, alongside savings and proceeds from selling a property (CMHC general requirements). The Financial Consumer Agency of Canada notes that the minimum down payment normally has to come from your own funds (FCAC), which is why a gift must be documented as truly yours once it is given.
Two points matter most:
- Non-repayable. If there is any expectation of repayment, it is a loan, not a gift. Borrowed money is treated as a non-traditional down payment, which CMHC limits to certain insured purchases and requires to be at arm's length.
- From a relative. CMHC's rule refers to a relative. Individual lenders and the other insurers set their own definitions (often immediate family), so confirm with your lender who may give.
For conventional mortgages (20% or more down), lenders set their own gift policies. Many accept family gifts with similar paperwork, but terms vary by lender.
How much down payment you need
A gift counts toward the same minimums as your own savings. According to FCAC, the minimum is:
- 5% of the purchase price up to $500,000;
- 5% of the first $500,000 plus 10% of the portion above $500,000, for prices up to $1.5 million;
- 20% for a purchase price of $1.5 million or more.
CMHC states that the purchase price must be below $1,500,000 for its homeowner insurance, with a maximum 25-year amortization (30 years may be available through its Home Start program for eligible buyers) and at least one borrower or guarantor with a credit score of 600 or higher (CMHC purchase insurance). The down payment calculator and CMHC insurance calculator show how a gift changes your minimum and your premium.
The paperwork lenders usually ask for
Requirements vary by lender and insurer, but expect to provide:
- A signed gift letter. It typically names the giver and recipient, states the relationship, the amount, the property address and that the money is a gift with no repayment expected. Lenders often supply their own form.
- Proof the funds are in your account. Lenders generally want to see the gift deposited in your bank account before closing, with a statement showing the deposit.
- Sometimes, proof of the giver's funds. Some lenders ask for a statement from the giver's account showing where the money came from, as part of their anti-money-laundering checks.
Large, unexplained deposits are one of the most common reasons a file stalls before closing. Moving the gift early and keeping the paper trail clean saves time.
Questions to settle as a family first
- Is this truly a gift, or does the giver expect something back? If repayment is expected, say so to the lender; misrepresenting a loan as a gift is mortgage fraud.
- Will the giver be on title? Being on title is a different arrangement with legal and tax consequences; speak with a lawyer or notary.
- If the buyer is married or in a common-law relationship, how should the gift be treated if the relationship ends? Provincial family law differs, so get legal advice before the money moves.
- Does the giver still have enough savings for their own needs and retirement?
Next step
Before the gift is transferred, ask your lender or a mortgage broker for the exact gift letter form and the timing they need for the deposit. Knowing the rules in advance helps avoid delays close to your closing date.
Sources
- Canada Mortgage and Housing Corporation, Purchase (homeowner mortgage loan insurance), 2026-11-04. Accessed 2026-11-04.
- Canada Mortgage and Housing Corporation, General requirements to qualify for homeowner mortgage loan insurance, 2020-06-05. Accessed 2026-11-04.
- Financial Consumer Agency of Canada, Saving for a down payment, 2025-10-15. Accessed 2026-11-04.
General information only, not legal, tax or financial advice. Lender and insurer requirements change and vary; confirm the current rules with your lender. Mortgage Directory does not verify or endorse listed professionals.
