Gifted Down Payments: Everything You Need to Know

Did you know that you can use a gift from a family member to help you purchase a home? 


Over a quarter of first-time homebuyers used gifts from their parents and nearly 10% of move-up buyers took advantage of this strategy in 2021 to help boost their down payment and land their forever home, despite the bidding war frenzy.


According to a new survey, 26% of first-time homebuyers in 2021 used gifts from their parents to help boost their down payment and land their forever home, despite the bidding war frenzy.


Many of the gifts that people receive from their loved ones come from their equity in their homes, which they can access through a refinance or reverse mortgage – a strategy that helps families pass on wealth sooner than planned.


In this article, we’ll show you how to ask for a gifted down payment and the strategies other Pineapple clients have used to speed up their wealth building.


Who can you receive gifted money from? 

Lenders allow you to accept money from immediate family members (parents, siblings, step-siblings, children or grandparents) for your down payment. If it’s coming from an aunt or uncle, talk with us so we can come up with a solution that will work for you and your lender.


My family doesn’t live in Canada.  Can I still receive gifted funds from their foreign bank accounts?

Yes, it’s possible but we have additional requirements. First, have them wire the funds to your account here in Ontario and then get us bank statements from your bank showing the money was deposited in your account. We’ll also need a letter from you stating the funds are for a property purchase.


What sources can a gifted deposit come from?

Savings (checking/savings account)

Reverse mortgage funds

Equity pulled from a refinanced mortgage (other property)

Second mortgage on a property, cashed out 

Cashed out investments 


When should the funds be deposited into my account?

Typically, the recipient will need to provide bank statements for the last 90 days that show deposits from you, as well as any other sums of money during this time (lender specific).


Will I have to pay tax on the gifted funds at the end of the year?

Canadians don’t have to worry about gift taxes when they make a down payment on a house. They won’t have to pay taxes on the amount gifted, as it’s considered non-taxable income.


How to ask for a gifted down payment? What to do before you ask for help from a family member?

If you’re considering a gift of a home, have a Pineapple mortgage broker crunch the numbers first. This will help you better understand how much of a gift you’d need to purchase your family member’s new home.


When you meet with your loved one in person, you’ll be able to discuss the numbers and potential benefits face-to-face.

Let them know your mortgage broker will also be working closely with them to make sure that any options discussed won’t affect their long-term financial or retirement goals.


Let them know that if they can’t contribute a gift, it’s okay. Not everyone is in a position to help right now, and there will be other opportunities down the road for them to be part of your home-buying journey.


How can Ahmad, mortgage specialist at and the Total Mortgage Source 360 Team help you?

Ahmad and his team are industry experts on mortgages. They offer excellent customer service and pride themselves on their ability to help you find the right mortgage product for your needs.

We can offer you some of the most competitive interest rates and mortgage products available because we have access to Canada’s leading lenders, including banks, mortgage firms, trust companies and private lenders. 

Want to learn more about how Ahmad can help you secure your mortgage? Reach out today to get the conversation started!  Ready to apply for your FREE mortgage pre-approval?  Click HERE 

Total Mortgage Source 360  FSRA#12151 – Each office is independently owned and operated 

Ahmad El-Farram, Mortgage Agent #M21005249

The Mortgage Centre at Total Mortgage Source 360 

License #12151

Your Local Aurora/Newmarket Mortgage Agent

M: 647.992.4411

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Meet Ahmad, Your Mortgage Specialist.

My promise to You:

I will find you the best rate and products

Unlike your traditional bank, which only has access to their own products, I have access to products from most major lenders in Canada which ensures I find the best product suited to your needs and goals

I will simplify the process for you

Buying a House Can Be Overwhelming, especially if you don't know where to start. My passion is helping guide clients and friends through the path to homeownership.


From the time of your initial inquiry, until the day of funding, consider me your guide and coach. I'll ensure you have a clear picture of the steps ahead so you move forward confidently and that every decision your make is an educated one.


I work for you, NOT the lenders.