# What equity sources are acceptable for a down payment?

> Acceptable equity sources are fundamental for mortgage loan insurance approval.

Category: Purchasing
Last verified: 2026-04-14
Source: https://ratellow.com/faqs/purchasing/what-equity-sources-are-acceptable-for-a-down-payment

## Answer
Acceptable equity sources are fundamental for mortgage loan insurance approval. Down payments can originate from savings, property sales, or non-repayable gifts from relatives. Unsecured personal loans are generally not acceptable as down payment sources for insured mortgages; CMHC guidelines do not explicitly allow unsecured personal loans as acceptable down payment sources regardless of LTV. Consider the CMHC Purchase program, which supports those with minimum down payments from flexible sources.

## Institutional highlights
- Your lender needs to confirm where your down payment money is coming from to make sure it's really yours.
- If someone gifts you money for your down payment, you'll need a letter stating you don't have to pay it back.
- Using borrowed money for your down payment can make getting approved harder, so your lender will look closely at this.
- Government programs that give you cash back can be used as part of your down payment.

## Related guide
- https://ratellow.com/guides/closing-costs-canada

## Sources
- Contents — https://www.sagen.ca/ups/underwriting-documentation/#documentation
- Footnotes — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/osfi-exempts-uninsured-mortgage-straight-switches-prescribed-mqr-implements-portfolio-lti-limits
- Property value used for the LTV ratio — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017
- Page 2 — https://assets.cmhc-schl.gc.ca/sf/project/cmhc/pdfs/factsheets/new/cmhc-quick-reference.pdf#page=2