Gifted Down Payment in Ontario? Don't Skip This Step

Josh Perz • July 7, 2026

Watch the video that inspired this post: Gifted Down Payment? Don't Skip This Step


Getting Help From Family Is More Common Than You Think

In Ontario's real estate market, gifted down payments have become one of the most common ways first-time buyers get into the market. With home prices where they are, saving a full down payment on your own — while paying rent — is a years-long challenge for most people. A gift from a parent or family member can bridge that gap and make homeownership possible years sooner.


But here's what a lot of buyers don't realize: a gifted down payment isn't as simple as having money transferred into your account. Lenders have very specific requirements around how gift funds are documented, and skipping any of those steps can delay your approval — or derail it entirely.


Why Lenders Care So Much About Gift Funds

Lenders aren't being difficult for the sake of it. Their concern is straightforward: they need to know that the money in your account is genuinely a gift — not a loan in disguise.


If the funds are actually a loan, your total debt load is higher than your application shows. That changes your debt service ratios, which changes your risk profile, which affects whether you should be approved at all. So lenders require documentation that confirms the money is a true, non-repayable gift — and they need to see it clearly before they'll approve the mortgage.


The Step You Cannot Skip: The Gift Letter

Every lender that accepts gifted down payment funds requires a gift letter. This is a signed document from the person giving the money that confirms three things:


First, the amount of the gift. Second, the relationship between the donor and the buyer — lenders typically require that the gift come from an immediate family member (parent, grandparent, sibling). Third, and most importantly, a clear statement that the funds are a gift and are not expected to be repaid.


Without this letter, the funds cannot be used as part of your down payment — full stop. It doesn't matter how long the money has been sitting in your account. If you can't document where it came from and confirm it's a gift, the lender will not count it.


The Other Requirements Buyers Often Miss


The Funds Must Be in Your Account

Most lenders want to see the gift funds deposited into your account before or at the time of approval — not just promised. You'll typically need to provide a bank statement showing the deposit, along with the gift letter. Some lenders will accept a confirmation that the funds will be available on closing, but this varies by lender and by how the file is structured.


The Donor May Need to Provide Proof of Funds

In some cases, particularly for larger gifts, the lender may ask for a bank statement from the donor confirming they actually have the funds to give. This isn't always required, but it's not uncommon — especially for insured mortgages where CMHC or Sagen guidelines apply.


The Gift Must Come From an Eligible Source

Not all gifts are treated equally. For insured mortgages (those with less than 20% down), the gift must come from an immediate family member. Gifts from friends, employers, or more distant relatives may not be accepted — or may require a different mortgage product entirely. If the source of the gift doesn't meet the lender's criteria, it can disqualify the funds regardless of how well-documented they are.


Timing Matters More Than Most People Realize

One of the most common mistakes I see is buyers who receive gift funds and then move the money around — transferring it between accounts, using it temporarily for something else, then moving it back. Every transfer creates a paper trail that the lender will ask you to explain.


The cleanest approach: once the gift is received, leave it in one account and don't touch it. When you apply for your mortgage, you'll provide a 90-day history of that account. A clear, simple paper trail makes the underwriter's job easy — and makes your approval smoother.


"A gifted down payment is a powerful tool. But the documentation has to be right. One missing step can hold up your entire approval." — Josh Perez

Get It Right Before You Make an Offer

The worst time to discover a problem with your gift documentation is after you've made an offer on a property. At that point, you're working against a firm closing deadline, and any hiccup in the approval process creates real pressure — and real risk.


The right time to sort out the gift letter, confirm the source of funds, and make sure everything is in order is before you start making offers. A 30-minute conversation with a mortgage professional can walk you through exactly what your lender will need and make sure nothing gets missed.


I work with first-time buyers across Ontario every day, including many who are using gifted funds as part of their down payment. Getting the documentation right upfront is one of the simplest ways to protect your purchase — and your timeline.



Using a gifted down payment to buy your first home? Book your free consultation todayand let's make sure your file is set up correctly from the start.

Josh Perez
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How to Finance a Spousal Buyout After Separation or Divorce

By Josh Perez • August 19, 2026
Mortgage Options During Divorce or Separation: What You Should Know If you’re going through—or considering—a divorce or separation, you may not realize that there are mortgage solutions specifically designed to help one party keep the home . For many people, the family home is their largest asset and where most of their equity is tied up. In situations like this, a spousal buyout program can allow one person to refinance the property and buy out the other party’s share—often up to 95% of the home’s value . This option can work whether you want to keep the home or your former partner does. What Is the Spousal Buyout Program? The spousal buyout program is a refinancing option that allows one owner to purchase the other owner’s share of the property as part of a separation or divorce settlement. In some cases, it can also be used to pay off jointly held debts, as outlined in a legal agreement. Below are some of the most common questions about how the program works. Is a finalized separation agreement required? Yes. Lenders require a signed and finalized separation agreement that clearly outlines how assets and debts are to be divided. This document is essential for approval. Can the funds be used for renovations or personal debts? No. Funds from a spousal buyout can only be used to: Buy out the other owner’s share of equity Pay off joint debts specifically listed in the separation agreement They cannot be used for renovations, personal loans, or unrelated expenses. How much equity can be accessed? The maximum amount available is the amount required to: Buy out the other party’s agreed-upon share of equity Pay off any joint debts listed in the agreement This amount cannot exceed 95% loan-to-value . What is the maximum loan-to-value allowed? The maximum loan-to-value is the lesser of : 95%, or The remaining mortgage balance plus the required buyout and joint debt payout The property must be the primary owner-occupied residence . Do all parties need to be on title? Yes. All individuals involved in the buyout must currently be registered on title. Your solicitor will confirm this through a title search. Does this only apply to married or common-law couples? No. While commonly used for married or common-law couples, the program may also apply to siblings or friends who jointly own a property and need one party to exit the mortgage. These cases are typically reviewed on an exception basis and require insurer approval. If no separation agreement exists, the purchase contract must clearly outline the buyout terms. Is a full appraisal required? Yes. A physical, on-site appraisal is required to confirm the property’s value before the mortgage can be finalized. Final Thoughts This overview covers some of the most common questions about mortgage options during separation or divorce, but every situation is different. Working with an independent mortgage professional gives you access to multiple lenders, specialized programs, and unbiased advice—so you can clearly understand your options and choose what’s best for your future. If you’re navigating a separation and need guidance around keeping or selling the home, feel free to connect anytime. All conversations are handled with discretion and confidentiality, and I’d be happy to walk you through your options.

How to Legally Assign a Construction Mortgage

By Josh Perez • August 12, 2026
Why More Mortgage Options Matter—Especially for Assignment Purchases One of the biggest advantages of working with an independent mortgage professional is access to choice. Instead of being limited to one lender and one set of products, mortgage brokers work with multiple lenders—each with different guidelines, risk tolerances, and mortgage solutions. That flexibility becomes especially valuable when your situation doesn’t fit neatly into a “standard” box. A great example of this is purchasing new construction through an assignment contract . Why Assignment Purchases Can Be Challenging Assignment purchases are often viewed as higher risk by traditional lenders. Rather than declining these deals outright, many lenders quietly make them difficult by adding layers of conditions, restrictions, or uncertainty. This can lead to delays, frustration, or financing falling apart late in the process. The Good News There are lenders—available exclusively through the broker channel —that have clear, favourable policies for assignment purchases. With the right lender and proper planning, these transactions are absolutely doable. Typical Financing Requirements for Assignment Purchases While every situation is unique, many lenders that allow assignment financing look for the following: Standard purchase qualification, including income verification, credit, and down payment Assignments accepted at either the original purchase price or current market value Minimum 620 credit score , with no prior bankruptcies or consumer proposals The full down payment must come from the purchaser —seller incentives cannot be used Required Documentation To secure financing, lenders typically require: The original purchase agreement signed by all parties The MLS listing (if applicable) The assignment agreement signed by the builder, original purchaser, and new buyer Any side agreements outlining changes to the purchase price A full appraisal to confirm value This list isn’t exhaustive, but it highlights that while assignment purchases require more coordination, they are very achievable with the right lender and guidance. Final Thoughts Assignment contracts can open doors to great opportunities—but only if your financing supports the transaction. This is where access to multiple lenders and specialized policies makes a real difference. If you’re considering purchasing new construction through an assignment, or if you’d like to explore more traditional purchase options, feel free to connect anytime. I’d be happy to walk you through the mortgage products available and help you choose an option that doesn’t limit your financing possibilities.