Gifted Down Payments:
The Rules Ottawa Buyers Need to Know

A big share of Ottawa first-time buyers get some help with their down payment, and lenders are completely fine with that, as long as it's documented the right way. The rules aren't complicated, but they trip people up because the timing and paperwork matter more than most buyers expect.

Yes, You Can Use a Gift, With Conditions

Lenders and mortgage insurers (CMHC, Sagen, Canada Guaranty) all allow gifted down payments, provided the money is a true gift with no expectation of repayment, and it typically needs to come from an immediate family member: a parent, grandparent, or sibling. A "loan" disguised as a gift doesn't qualify, and lenders are specifically looking for signs of that.

What the Gift Letter Must Say

Every lender wants a signed gift letter before closing. At minimum, it needs to state:

• The dollar amount being gifted.
• The relationship between the giver and the buyer.
• A clear statement that it's a gift, not a loan, with no repayment expected and no interest in the property.
• The property address the funds are going toward.
• Signatures from the person gifting the funds.

This is a standard, short document, your mortgage agent or lawyer can provide the template, it's not something you need to draft from scratch.

The Paper Trail Lenders Actually Want

This is the part that catches people off guard. It's not enough to just say the money is a gift, lenders want to see it move:

1. The gift leaving the giver's account, a withdrawal or transfer showing the money coming from their bank.
2. The gift landing in your account, a deposit matching the same amount, ideally shortly after it leaves theirs.
3. A reasonably clean deposit history otherwise, unexplained large deposits from unclear sources are what trigger extra scrutiny, a documented gift from a named family member is not the same thing.

Give this a few weeks before you need to close, not a few days. Banks flag large, last-minute deposits for review, and untangling that during a tight closing window adds stress you don't need.

Does a Gift Affect Your Stress Test or Insurance?

No, gifted funds count the same as saved funds for down payment purposes. What the source of your down payment doesn't change is the mortgage stress test on your income, or CMHC insurance premiums if you're putting down less than 20%. Those are based on your income, debts, and loan-to-value, not where the down payment came from.

What About the FHSA or Home Buyers' Plan?

A gift and your own savings, RRSP Home Buyers' Plan withdrawal, or FHSA funds can all be combined toward the same down payment. There's no rule requiring your down payment to come from a single source, lenders just want each piece documented, whichever accounts it's coming from.

Common Mistakes That Slow Things Down

• Moving the gift too close to closing, leaving no time to explain a large, unexplained deposit if the bank flags it.
• Skipping the gift letter because "it's just family", lenders require it regardless of how the money moved.
• Gifting from someone outside the accepted relationship, some lenders are strict about immediate family only, worth confirming before assuming an aunt, uncle, or friend's gift will be accepted the same way.

Getting help with your down payment? Tell Sean the details early, he'll make sure the paper trail is exactly what your lender needs, before it becomes a last-minute scramble.