Definition
When part or all of a buyer's down payment comes from a gift (parent, sibling, close relative), Canadian mortgage lenders require an official gift letter. This document, signed by the donor, confirms the sum is not a disguised loan — meaning there is no repayment obligation, direct or indirect.
The gift letter must typically specify: the donor's name and relationship to the buyer, the gift amount, an explicit statement that it is a gift with no repayment condition, and the donor's signature. Some lenders also require funds to be in the buyer's account for at least 15 to 90 days before application submission ('seasoning').
Gifts from immediate family (parents, grandparents, siblings) are generally accepted by all A lenders. Gifts from friends or colleagues are often refused or treated differently. For SCHL-insured loans, a gift letter is mandatory whenever the down payment includes any amount from a source other than the borrower's personal savings.