Short answer
Expect to document who gave the money, their relationship to you, the amount, the transfer into your account and whether repayment is expected. The lender or mortgage insurer sets the acceptable donor and timing rules. If the money is really a loan, describe it as borrowed funds because it changes the debt calculation.
The problem families discover too late
The buyer receives a large transfer before closing and calls it a family gift, but there is no clear trail from the donor. Underwriting pauses while the buyer gathers statements, and the closing date does not move with the paperwork.
A practical Ontario example
A parent sends $80,000 in two transfers from different accounts. The lender may request the signed gift letter, proof of both deposits and evidence showing the funds were available to the donor. Cash deposits with no credible trail create a harder question.
How A, alternative/B and private routes may differ
- Insured A mortgage: donor, proof and minimum-down-payment rules must meet both lender and mortgage-insurer policy.
- Conventional A or alternative/B mortgage: a wider range of structures may exist with at least 20% equity, but the lender still verifies source and repayment obligations.
- MIC/private lender: source-of-funds and anti-fraud checks still apply; private financing is not a way to hide a borrowed down payment.
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
- Who is the donor and what is the relationship?
- Has the money reached my account?
- Can every transfer be traced?
- Is any repayment, side agreement or ownership expected?
Rajiv’s practical view
Move the gift through normal banking channels and keep the statements. Do not create last-minute transfers between several relatives and accounts unless the full trail can be explained.
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