What a Canada mortgage gift letter is for
Many Canadian home buyers get help with the down payment from their parents or other family members. Lenders and mortgage insurers accept that, but they have to be satisfied of two things before they advance the mortgage: that the money is a true gift and not a loan the buyer will have to repay, and that the money comes from a legitimate source. A gift letter answers the first question, and the bank records listed in the checklist answer the second.
This template gives both. The letter identifies the donors and their relationship to the buyers, the amount, the property and how the money is being transferred. The donor declares that the gift is not repayable, carries no interest, creates no claim or ownership interest in the property, does not come from the seller or anyone else with an interest in the sale, and comes from the donor's own funds. The buyers sign an acknowledgment, and an optional witness line is included. A proof of funds checklist and plain guidance on who can give, minimum down payments, timing, loans versus gifts, closing costs and tax round it out.
When to use it
Use it when a buyer in Canada is using money from a family member toward the down payment on a home, whether the mortgage is insured by CMHC, Sagen or Canada Guaranty, or conventional with 20 per cent or more down. Complete it when the lender asks for it, usually once you have an accepted offer or a pre-approval, and provide the bank records with it.
If your lender has its own gift letter form, use theirs, and use this template's checklist to gather the proof. If the money must be repaid, it is a loan, not a gift, and must be disclosed to the lender as debt.
What's inside
The full list of sections and fields in this template, in the order they appear.
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Lender and parties
- Lender and reference number
- Donors and relationship
- Buyers
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The gift
- Amount
- Property address
- Transfer method
- Donor and buyer accounts
- Date
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Declarations and signatures
- Gift not repayable
- No interest or lien
- Not from the seller or agent
- Donor's own funds
- Donor signatures
- Optional witness
- Buyers' acknowledgment
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Proof of funds and guidance
- Six-item document checklist
- Who can give
- Minimum down payment
- Timing
- Loans versus gifts
- Closing costs
- Tax and family notes
Preview pages
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Page 1 -
Page 2 -
Page 3
How to complete the letter
- Address it to the lender. Include the mortgage application or reference number if you have one.
- Identify the donors. Give full legal names, addresses and their relationship to the buyers.
- Name the buyers. List every buyer on the mortgage application.
- Describe the gift. Enter the amount, the property and how and when the money is transferred.
- Have the donors sign the declaration. Each donor signs and dates it.
- Have the buyers sign the acknowledgment. Every buyer signs.
- Gather the proof. Collect the donor's statement, the transfer record and the buyer's deposit statement.
- Send it to the lender. Provide the letter and the documents together.
- Keep copies. Both donor and buyers keep a signed copy.
Example: a completed letter excerpt
Fictional parents in Halifax help their daughter buy her first condo:
Donors: Robert and Linda Chen, parents of the buyer, Bedford, Nova Scotia. Buyer: Emily Chen, Halifax, Nova Scotia. Gift: $40,000 toward the purchase of 1802-1550 Hollis Street, Halifax, by e-transfer in two amounts from the donors' joint account to Emily's savings account on April 2 and April 3, 2026. Declaration: signed by both parents on April 4, 2026; acknowledgment signed by Emily the same day.
Emily's purchase price is $420,000, so her minimum down payment is $21,000. With $40,000 from her parents and $14,000 of her own savings, she puts down $54,000, and she gives her broker her parents' March statement, the two e-transfer confirmations and her April statement showing the deposits.
Canadian rules to know
These are the rules and practices this letter reflects.
- CMHC down payment sources. A non-repayable financial gift from a relative is a traditional down payment source.
- Minimum down payment. 5 per cent of the first $500,000 and 10 per cent of the portion above it, with insured purchases below $1,500,000.
- Debt service ratios. CMHC's limits of 39 per cent (gross debt service) and 44 per cent (total debt service) are why an undisclosed loan matters.
- Anti-money laundering rules. Lenders must verify the source of funds and keep records under federal proceeds of crime and anti-money laundering law.
- Tax. Canada has no gift tax; attribution rules can apply to gifts to a spouse or minor child.
Mistakes that delay mortgage approvals
The common problems are a gift letter with no relationship stated, a gift that is really a loan, money transferred in cash or through several accounts so it cannot be traced, a transfer made after the lender's deadline, a donor who signs but provides no statement showing the funds, and only one of two buyers signing. Following the checklist and transferring the money directly and early avoids each of them.
Frequently asked questions
Can a gift be used as a down payment in Canada?
Yes. CMHC treats a non-repayable financial gift from a relative as a traditional down payment source, alongside savings and the proceeds of selling a property. Lenders require a signed gift letter and evidence that the money came from the donor and reached the buyer's account.
Who can give a down payment gift in Canada?
Most lenders accept gifts from immediate family, such as parents, grandparents and siblings, and some accept other relatives. The gift must not come, directly or indirectly, from anyone with an interest in the sale, such as the seller, builder or real estate agent.
What does a mortgage gift letter need to say?
That the money is a gift that does not have to be repaid, the amount, the donor's relationship to the buyer, the property being bought, and that the donor will not take an interest in or claim against the property. It is signed by the donor, and many lenders also want the buyer's acknowledgment.
Is a gift to help buy a house taxable in Canada?
Canada has no gift tax, and a cash gift is generally not taxable for the person who receives it. Donors giving to a spouse or a minor child should ask about the attribution rules, which can affect who pays tax on income earned from the gifted money.
What is the minimum down payment in Canada?
For an insured mortgage, 5 per cent of the first $500,000 of the purchase price and 10 per cent of the portion above it, for homes priced below $1,500,000. Homes at $1,500,000 or more require at least 20 per cent down.
