Step-by-step client guide
Gifted down payment
Gifted down payments are accepted by every major Canadian lender — provided they're documented to FINTRAC and lender standards. The work is in the paper trail, not in the conversation with your parents.
Who this guide is for
First-time buyers receiving help from parents, grandparents, or a spouse, and anyone using inherited or gifted funds as part of the down payment.
Why this is harder than a standard file
Underwriters need to confirm the funds are a true gift (not a loan), came from an immediate family member, and have a clean source-of-funds trail.
Track exactly where you are on this file.
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Decide the amount and confirm it will be a true gift, not a loan. A documented loan from a parent counts as debt and reduces your qualification.
Your plan
0 of 4 plan steps completeDocuments to assemble
0 of 5 documents gatheredMistakes we see clients make in this scenario
- ·Receiving the gift in cash. Cash is almost impossible to document and most lenders will not accept it.
- ·Using a generic 'gift letter' from the internet. Lenders require their own template, signed and dated.
- ·Splitting the gift across many accounts after receiving it. Keep it in one place until closing.
- ·Receiving the funds days before closing. The 30-day seasoning window is what most underwriters want to see.
Red flags that will sink the file
- Gift coming from a non-immediate-family member (friend, employer, distant relative) — most A-lenders refuse.
- Gift documented as a 'loan' anywhere — in texts, emails, or the gifter's notes.
- Source of the gifter's funds that cannot itself be explained.
What this realistically costs you
- Lenders charge nothing extra for a gifted down payment, but expect a few hundred dollars in legal time to coordinate the paperwork at closing.
- If the gift is from outside Canada, your bank may charge a wire fee ($15–$75) and apply a currency-conversion spread.
How the underwriter actually reads this
The signed gift letter alone is not enough. Underwriters trace the funds back through the gifter's account and may ask for explanations on large recent deposits.
What moves this file up
- Transfer the gift at least 30 days before closing
- Keep the funds in a single account once received
- Have the gifter retain statements showing the source of the gift on their side
Questions clients ask us
Canada has no gift tax. Neither you nor the gifter owes tax on a cash gift between family members. (Gifts of appreciated property are different — talk to an accountant.)
Most lenders accept gifts from immediate family, which usually includes parents, grandparents, siblings, and parents-in-law. Confirm the lender's definition before you plan around it.
Then it's not a gift — it's debt, and it has to be disclosed. Disguising a loan as a gift is mortgage fraud. The clean path is either a real gift or a real, documented family loan factored into your qualification.
Get a real, underwritten pre-approval — not a system-generated number.
We'll route your file to a lender whose policy fits this scenario. No credit pull until you've seen the plan.
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Written and reviewed by the Canadian Mortgage Compass Editorial Desk. This page is general information for Canadian readers and is not mortgage, legal, tax, or financial advice, and not an offer of credit. Rules, rates, and lender policies change; confirm your own situation with a licensed mortgage professional in your province. Editorial policy · Corrections