The short version
- OSFI's Guideline B-20 says a gifted down payment should be accompanied by a letter from the giver confirming no recourse, meaning nothing has to be paid back.
- Federally regulated lenders are expected to make rigorous efforts to determine whether a down payment came from the borrower's own resources or savings.
- Borrowed funds are treated differently from gifts and call for further risk mitigation, so a family loan should never be described as a gift.
- Lenders on a September 2026 panel said unexplained deposits must be traced, so the sooner the gift is in the account and documented, the smoother the file.
What the guideline says
Most first-time buyers who get help from family assume the hard part is the money. For the lender, the hard part is often the proof.
The Office of the Superintendent of Financial Institutions (OSFI) publishes Guideline B-20, which sets out expectations for how federally regulated lenders underwrite residential mortgages. On down payments, it says lenders should make rigorous efforts to determine whether the down payment is sourced from the borrower's own resources or savings.
It then addresses gifts directly: where part or all of the down payment is gifted, it should be accompanied by a letter from those providing the gift confirming no recourse. Where non-traditional sources such as borrowed funds are used, the guideline says further consideration should be given to establishing greater risk mitigation. Documentation verifying the source of the down payment is also on the guideline's list of what a lender's file should contain.
B-20 applies to federally regulated lenders. Other lenders set their own policies, which are often similar in spirit but not identical, so what a specific lender wants should be confirmed before you are on a closing deadline.
What “no recourse” means
No recourse means the giver has no claim against you for the money. It is a gift, with no expectation of repayment now or later. That is what the letter confirms.
Lender templates differ, but a gift letter commonly identifies the giver and their relationship to you, the amount, and a statement that the money is a gift that does not have to be repaid, and it is signed. Some lenders supply their own form. Ask your broker which one applies before anyone signs, so that it does not have to be redone.
The paper trail lenders look for
The letter is one piece. Lenders also see your bank statements, and at a September 2026 lender panel reported by Canadian Mortgage Trends, National Bank's Enrik Brassard said that when a file contains an unexplained deposit, lenders must trace the source of the funds, adding time and work to the review. Brassard noted that a good credit score does not remove that step.
A gift that arrives without explanation looks the same, on a statement, as any other unexplained deposit. That is why timing and tidiness matter.
- Move the money early. Funds that are already in your account, with a matching gift letter, are easier to trace than money arriving at the last minute. Ask your lender or broker what timing they need.
- Keep the transfer visible. A direct transfer between accounts leaves a record on both sides; cash does not.
- Match the amounts. The amount on the letter should line up with the deposit on the statement.
- Keep the giver's paper too. Some lenders may ask where the giver's funds came from as well.
For a closer look at how lenders read a file and why complexity slows it down, see why mortgage files stall over paperwork.
A gift is not a co-signer
Families sometimes conflate the two. A gift adds to your down payment and the giver steps away from the mortgage. A co-signer or guarantor helps you qualify and takes on a legal obligation for the debt. They solve different problems and carry very different risks for the parent, and our First Home Hub has downloadable guides on cosigner versus guarantor.
If a parent is already helping with everyday costs, our article on how family support is used shows why a one-time, documented contribution can serve everyone better than open-ended help. And if you are unsure how deposits and down payments differ, start with deposit versus down payment.
Before you make an offer
Bring the plan to your broker before you start touring homes: how much is being gifted, who is giving it, when it will land and which account it will land in. Then use the pre-qualification tool to see the range your income and debts support with that down payment.
Gifts can also carry legal and tax questions for the giver, which is a conversation for a lawyer or tax professional and is outside what a Mortgage Broker advises on. Our Collective partners include the kinds of professionals families often need.
Nearly thirty years in Canadian financial services, based in Waterloo Region and working across Ontario. Most people are handed a product — you deserve a plan.
General information, not advice for your situation, and not an offer of credit. Documentation requirements differ by lender and by file. Gifts can have legal and tax implications for the giver and receiver; speak to a lawyer or tax professional as needed. Any mortgage is subject to lender approval and final terms. Illustrative only.
Sources: OSFI — Guideline B-20: Residential Mortgage Underwriting Practices and Procedures · Canadian Mortgage Trends — Mortgage lenders say credit appetite is steady, but complex files are slowing deals