Short answer
No. CMHC identifies a non-repayable gift from a relative as a traditional down-payment source. If repayment is expected, it is a loan and must be disclosed so the lender and mortgage insurer can assess the added debt.
The family concern behind the question
Parents transfer the minimum down payment and the buyer signs a gift letter, but the family privately expects monthly repayment after closing.
What the verified guidance says
CMHC’s homeowner mortgage-loan-insurance requirements list savings, sale proceeds and a non-repayable relative’s gift as traditional sources. The lender must also verify the source under its own documentation and anti-fraud processes.
Where the answer can change
CMHC guidance applies to mortgages submitted for CMHC insurance, not every conventional A, alternative/B, MIC or private deal. Other insurers and lenders set their own eligible donor, relationship and documentation rules. A genuine loan may be acceptable in some programs if disclosed and qualified.
A practical Ontario example
Illustration only: A buyer receives $60,000 from a parent and signs that it is non-repayable. A bank statement later shows a scheduled repayment. The inconsistency can delay approval, change debt ratios or raise a misrepresentation concern.
Practical steps before anyone signs
Decide honestly whether the money is a gift, loan, shared-equity contribution or ownership investment before applying. Give the broker the agreement and repayment expectation so the correct lender and insurance policy can be used.
Five questions the family should answer
- Who will own the property, and in what percentages or title structure?
- Who is legally responsible for the complete mortgage and other housing costs?
- Is family money a genuine gift, a loan, shared equity or an ownership contribution?
- How will this affect each person’s credit, future borrowing, tax and estate plan?
- What is the documented route for removing support, buying someone out or selling?
Rajiv’s broker perspective
Family help can turn a decline into an approval, but approval is only the first test. I would look at both households after closing, not only the buyer’s qualification today. The lender’s documents decide who owes the mortgage. The title documents decide registered ownership. A family agreement can organize responsibilities between the parties, but it cannot reduce the lender’s rights. We should compare a lower purchase price, larger gift, co-signing, co-ownership, insured or conventional A lending, alternative/B lending and an equity solution only after the legal and cash-flow consequences are clear.
Related: Mortgage declined? Start here · Mortgage Knowledge Centre · Real Estate Centre · Updates & Rules Centre
Considering a parent, relative or friend on the mortgage?
Before anyone signs, send Rajiv the purchase price, down payment source, income gap, intended ownership and future removal plan. He can compare mortgage structures in plain language and identify the legal and lender questions that need answers.
Book a family-assisted mortgage strategy session Ask for an Ontario co-ownership lawyer referral