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.

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Divorce and Your Mortgage in Ontario: Where to Start

By Josh Perez • July 2, 2026

Watch the video that inspired this post: Divorce and Your Mortgage, Where to Start One of the Most Overlooked Financial Conversations in a Divorce Divorce is one of the most emotionally and financially complex situations a person can go through. There are lawyers, mediators, custody arrangements, and asset divisions all happening at once. In the middle of all of that, the mortgage often gets treated as an afterthought — something to sort out once the dust settles. That's a mistake. The mortgage is usually the largest financial asset — and the largest liability — in the marriage. How it gets handled during separation can affect your credit, your borrowing power, and your ability to buy a new home for years to come. Here's where to start. Step 1: Understand What You're Actually Dealing With Before any decisions are made, you need a clear picture of the mortgage as it stands today. That means knowing the current balance, the interest rate, the term and maturity date, and whether there are any prepayment penalties for breaking the mortgage early. This matters because the options available to you — and the costs associated with each — depend entirely on these details. A mortgage with two years left on a fixed term and a significant penalty to break is a very different situation from one that's coming up for renewal in three months. Get the mortgage statement. Read it carefully. Or better yet, have a mortgage professional review it with you so you understand exactly what you're working with before you sit down with a lawyer or mediator. Step 2: Know Your Three Main Options Option 1: One Spouse Buys Out the Other This is the most common outcome when one person wants to stay in the home. The spouse who is keeping the property refinances the mortgage in their name alone, uses the proceeds to pay out the departing spouse's share of the equity, and takes on full ownership and full responsibility for the debt. The critical question here is whether the staying spouse can qualify for the mortgage on their own . This is where a lot of people get a rude awakening. What two incomes could support may not be supportable on one. A mortgage professional can run the numbers before you make any commitments — saving you from agreeing to something in mediation that you can't actually execute at the lender. Option 2: Sell the Property and Split the Proceeds When neither party can or wants to keep the home, selling is often the cleanest solution. The mortgage gets paid out from the sale proceeds, any remaining equity is divided according to the separation agreement, and both parties walk away with a clean slate. The timing of a sale matters here. If the mortgage has a significant prepayment penalty, it may be worth waiting until the term matures — or factoring that penalty into the negotiation of who gets what. Option 3: Both Names Stay on the Mortgage Temporarily In some cases, especially when children are involved and one parent needs time to stabilize financially, both spouses remain on the mortgage for a defined period while one continues to live in the home. This can work, but it carries real risk: both parties remain legally responsible for the debt, and any missed payments will affect both credit files — regardless of what the separation agreement says. If you go this route, the timeline for transitioning to one of the first two options needs to be clearly defined and legally documented. Step 3: Protect Your Credit Before Anything Else Here's something people don't always think about in the chaos of a separation: your credit file doesn't care about your personal circumstances. If the mortgage payment is missed because you and your ex couldn't agree on who was paying it this month, both of your credit scores take the hit. Until the mortgage is formally dealt with — either through a buyout, a sale, or a documented interim arrangement — make sure payments are being made on time, every time. The cost of a missed payment on your credit report will follow you long after the divorce is finalized. Step 4: Get Independent Mortgage Advice Early A family lawyer will guide you through the legal side of the separation. But they are not mortgage specialists. The mortgage piece — what you qualify for on your own, what the penalties are, what your options look like — needs input from someone who works in that space every day. Getting that advice early, before the separation agreement is signed, means you're making decisions based on what's actually possible — not what sounds fair in a room without the financial details in front of you. "The mortgage doesn't pause for a divorce. The sooner you understand your options, the more control you have over what comes next." — Josh Perez Moving Forward: Your Next Chapter Starts With Clarity Whether you're keeping the home, selling it, or starting fresh in a new place, the path forward is clearer when you understand your mortgage situation completely. I work with clients going through separation regularly, and the ones who get the mortgage conversation started early consistently end up in a stronger position — both financially and emotionally. My consultations are completely free. No pressure, no judgment — just a clear, honest look at your numbers and your options so you can make informed decisions during one of the most important transitions of your life. Ready to get clarity on your mortgage situation? Book your free consultation today and let's figure out your best path forward.

Down Payment Options for Canadian Homebuyers

By Josh Perez • July 1, 2026

For most Canadians, the down payment is the biggest hurdle to homeownership. A down payment is the initial amount you contribute toward your property purchase, while the lender covers the rest through a mortgage. By law, Canadian lenders can only finance up to 95% of a property’s value, which means you’ll need at least 5% down to qualify. If you’re putting down less than 20%, your mortgage must be insured through one of Canada’s three default insurance providers— CMHC, Sagen (formerly Genworth), or Canada Guaranty . This insurance comes at a cost, but it can be rolled into your mortgage amount. The less you put down, the higher the premium. Since saving a down payment can feel overwhelming, it helps to know the different sources you can draw from. Here are the most common options available to Canadian homebuyers: 1. Savings & Personal Resources The most straightforward source is your own savings. Lenders will ask to see a 90-day history of the funds in your account. Any large deposits outside of regular payroll must be explained with documentation—such as the sale of a vehicle or a transfer from an investment account. This requirement isn’t just red tape; it’s part of Canada’s anti-money laundering rules. 2. Proceeds from the Sale of a Property If you’ve recently sold another home, you can use the proceeds as a down payment on your new purchase. Proof of the sale—such as the final statement of adjustments from your lawyer—will be required. 3. RRSP Home Buyers’ Plan (HBP) First-time buyers can withdraw up to $35,000 each (or $70,000 as a couple) from their RRSPs to put toward a down payment under the federal Home Buyers’ Plan . The funds are withdrawn tax-free, but they must be repaid over a 15-year period. This is a popular option for buyers who have been steadily contributing to their retirement savings. 4. Gifted Down Payment With today’s housing prices, many buyers turn to family for help. A parent or immediate family member can provide a gift that makes up part—or even all—of the required down payment. The lender will require a signed gift letter confirming that the money is a true gift (with no repayment expected) and proof that the funds have been deposited into your account. 5. Borrowed Down Payment In some cases, you may be able to borrow your down payment. This option is usually available only if you have strong credit and sufficient income. The payments on the borrowed funds are factored into your debt service ratios, so affordability is key. Lenders typically use 3% of the outstanding balance when calculating the additional payment. The Bottom Line A down payment doesn’t have to come from just one source—it can be a combination of savings, gifted funds, RRSPs, or other resources. What matters most is being able to show where the money came from and that it meets lender requirements. If you’d like to explore your options or learn how much you might qualify for, it’s never too early to start the conversation. Connect with us today—we’d be happy to help you create a plan and take the first steps toward homeownership.