Short answer
Sometimes. The lender must permit a non-traditional or borrowed down payment, and the payment on that debt is included when you qualify. Insured, conventional A, alternative/B and private programs do not all treat it the same way. The borrowed source must appear on the application.
The problem families discover too late
A buyer has enough room on a line of credit and assumes it solves the cash requirement. Once its monthly payment is added, the debt-service ratios fail and the original pre-approval no longer works.
A practical Ontario example
Borrowing $40,000 completes the down payment, but the qualifying payment on that line reduces the mortgage amount. A family gift, delayed purchase, lower price or different lending route may produce a safer result than stacking debt.
How A, alternative/B and private routes may differ
- A lender: only selected products permit borrowed down payment, subject to strong credit and debt-service limits.
- Alternative/B lender: may accept broader sources with at least 20% down, but the debt, fees and repayment plan still matter.
- MIC/private lender: can sometimes provide secondary financing against other property equity, with higher costs and a written exit.
Policy boundary: Each lender and mortgage insurer sets its own borrower, guarantor, gift, debt-service and title requirements. FCAC explains consumer rights and general mortgage concepts; it does not set individual lender underwriting policy.
Questions the family should answer
- Does this exact lender permit the source?
- What payment will underwriting use?
- Will the advance appear on credit before closing?
- Can I carry both debts if rates or expenses rise?
Rajiv’s practical view
Recalculate qualification before drawing the line. Available credit is not the same as affordable down payment.
Source and context
General Ontario education. Lender, mortgage-insurer, tax, title and legal treatment depend on the facts and documents. Examples are not approvals, quotes, tax advice or legal advice.
Continue your research
Mortgage Knowledge Centre · First-home-buyer rules · Real Estate Centre
Sharing ownership or family money?
Ask Rajiv for a referral to an Ontario real-estate lawyer who can document the arrangement before closing. You decide whether to retain anyone referred.
Want to help without creating the wrong mortgage?
Send Rajiv the purchase price, down payment, family contribution and each person’s future borrowing plans. He can compare A, alternative/B, MIC and private options where appropriate.
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Rajiv Verma, Mortgage Broker · Ontario