In Canada, there are several sources for a down payment on a home that are acceptable. Here’s a breakdown of the most common options — especially important for first-time buyers and investors:

Common Down Payment Sources

Personal Savings

Funds saved in a bank account, GICs, or other liquid investments.
Must be in your account for at least 90 days to avoid being flagged as a borrowed gift or unsecured loan.

RRSPs (Home Buyers’ Plan)

First-time buyers can withdraw up to $60,000 (as of 2024) tax-free.
Must repay it over 15 years (or it becomes taxable).
Funds must be in your RRSP for at least 90 days before withdrawal.

Gifted Funds from Immediate Family

A parent, sibling, or grandparent can gift part or all of the down payment.
Must come with a signed gift letter confirming it’s not a loan and no repayment is expected.
Funds must be in your account before closing (usually 15+ days).

Proceeds from the Sale of Another Property

If you're selling an existing home, the net proceeds can be used as a down payment on your next purchase.
Must show proof through a firm sale agreement and lawyer’s trust ledger.
If the property won’t close in time, you can usually arrange for “bridge financing” to loan the extra money until the property closes

Investment Liquidation

Stocks, bonds, mutual funds, or crypto that have been converted to cash.
Documentation is needed to show the source and transfer to your account.

Borrowing Funds (Less Common)

A Home Equity Line of Credit, Line of Credit or personal loan may be allowed, but it must be disclosed and can affect your debt ratios.
Not allowed for insured mortgages (under 20% down).

Extra Tips:

Always document your down payment sources — lenders must verify where the money is coming from.
Avoid large unexplained deposits close to your mortgage application — they trigger compliance reviews.
Never use cash deposits — it will raise so many red flags.
Always ask your mortgage broker if there are any requirements related to the funds that you must meet.

Contact me if you have any questions or need a referral to a mortgage.