Published 17 September 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty
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Most Ontario lenders accept a gifted down payment from close family if you provide a signed gift letter saying the money never has to be repaid and show the funds deposited in your account before closing. If the money has to be repaid it is a loan, which the lender counts as debt.
Many first-time buyers in Toronto get help from family. Lenders accept a gift as a down payment, but they want proof that it’s really a gift and that it’s in your account.
What lenders usually require
- A signed gift letter confirming the amount, the relationship, and that the money is a true gift that never has to be repaid.
- Proof the money arrived: bank statements showing it deposited in your account, usually some weeks before closing.
- A close family member as the giver: lenders commonly accept parents, grandparents or siblings, but each lender sets its own list.
Ask your lender or broker for their exact form and timing before the money moves.
A gift or a loan?
If the money has to be repaid, it isn’t a gift. A lender will count a loan as debt, which lowers what you can borrow. Signing a gift letter for money that is really a loan is misrepresentation to the lender.
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Protecting the gift
Parents often worry about what happens to a gift if the relationship later ends. Ontario family law treats a gift from a third party to one spouse differently from property the couple shares. The rules on the matrimonial home are specific, though, and a gift used to buy a home both spouses live in may not stay separate.
- Get legal advice before the purchase. A lawyer can suggest options such as a cohabitation or marriage agreement.
- Keep paperwork: the gift letter, the bank records, and how title is held.
How a gift fits with other programs
- First-time buyer status: a gift doesn’t affect it.
- FHSA and Home Buyers’ Plan: you can combine a gift with both, subject to each program’s rules.
- Parents on title: a parent who goes on title as a co-owner is no longer just giving a gift. That changes tax, lender and family law questions, so get advice.
The takeaway
Use a real gift letter, move the money early and keep the records, and get legal advice first if you want the gift protected should the relationship end.
Talk it through with me
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Tell me your savings, income range and target area. I will send a realistic price range and next steps.
I will come back to you personally, usually the same day. If it is urgent, call or text 833-330-1925.
Frequently asked questions
Can a down payment be a gift in Ontario?
Yes. Most lenders accept a gift from close family with a signed gift letter and proof of the deposit.
What goes in a gift letter?
The amount, the giver and their relationship to you, and a statement that the money never has to be repaid.
Does a gifted down payment have to be repaid?
No. If it has to be repaid, it’s a loan, and the lender treats it as debt.
Is a gift protected if we separate?
Not automatically, especially if it buys a matrimonial home. Speak to a family lawyer before you buy.
Sources
- Financial Consumer Agency of Canada — down payment — minimum down payment and sources of funds
- Ontario Family Law Act — property and the matrimonial home on separation
Related reading
- Minimum Down Payment in Ontario 2026: The Exact Amount for Every Price Point
- Deposit vs Down Payment in Ontario: Not the Same Thing
- First Home Savings Account (FHSA) in 2026: how it works for Toronto buyers
- FHSA vs RRSP Home Buyers’ Plan: which to use first (and how to stack them)
About the author — Jatin Dua, Toronto and GTA real estate broker
I am Jatin Dua, Broker of Record and co-founder of RE/MAX Quantum Realty Inc., Brokerage, Unit 101, 799 The Queensway, Etobicoke. I work with buyers and sellers across Toronto and the GTA, with deep local knowledge of the west end. Four-plus years of active GTA transactions and over $100 million in sales volume. Every market figure here comes from TRREB’s published tables and every rule from RECO or Ontario legislation, so you can check all of it without asking me.
Reach me at connect@jatindua.com or 833-330-1925, or book a call.