# Living Inheritance Toronto: Gift a Down Payment | TorontoReverseMortgage.ca > A living inheritance in Toronto: help your child with a down payment now, from your home's value, with no gift tax. Free estimate, no sales pressure. URL: https://torontoreversemortgage.ca/living-inheritance-toronto/ Reverse mortgages in Toronto # Living Inheritance in Toronto: Helping Your Children Buy a Home A living inheritance in Toronto means giving part of what your children would inherit now, often as a down payment on a first home. A reverse mortgage can provide the money without selling your home, with no required monthly mortgage payments. The money is a loan to you, not income, and Canada has no gift tax. [Get my free estimate →](/estimate/) [Try the calculator](/tools/reverse-mortgage-calculator-toronto/) Free · No sales pressure · Getting an estimate doesn't affect your credit Last updated October 31, 2026 - ✓For homeowners 55 and older - ✓No required monthly mortgage payments - ✓The money is tax-free - ✓You keep ownership of your home - ✓You never owe more than your home is worth - ✓Your own lawyer explains it before you sign [TorontoReverseMortgage.ca](/) describes how a living inheritance works in Toronto. Parents give part of what their children would inherit now, while they can see it help. In Toronto, the help is often a down payment on a first home. The challenge is not usually the wish to help. It is that the family’s money is in the house, and the parents want to keep living there. A reverse mortgage lets homeowners 55 and older take money from the home’s value with no required monthly mortgage payments. ## What happens after your free estimate The first step is the free estimate form. It asks your age, your home’s value and what you still owe, and it shows an estimate on screen. Getting an estimate doesn’t affect your credit. Richard Hopkins, Mortgage Broker, then compares every reverse mortgage lender in Canada and sends your options and his recommendation by email. For a living inheritance, you’ll be asked how much you want to give, when your child needs it and how much you’d like to keep for later years. Each of your children can be copied on every email, so the whole family reads the same numbers. Calls by phone or video call can include them too. You make the decision, and nothing is signed at this stage. The process has seven steps, and you can stop at any of them. The one meeting normally held in person is near the end, with your own lawyer, for independent legal advice. ## What a first home costs in Toronto A typical condo apartment in the City of Toronto had a benchmark price of $543,800 in September 2026, and a typical townhouse $714,700 ([TRREB Market Watch, September 2026](https://trreb.ca/wp-content/files/market-stats/market-watch/mw2609.pdf)). The benchmark is the Toronto Regional Real Estate Board’s price for a typical home. Both were lower than a year earlier, by 6.36% and 5.04%. For a home under $1.5 million, the minimum down payment is 5% of the first $500,000 and 10% of the rest ([Financial Consumer Agency of Canada](https://www.canada.ca/en/financial-consumer-agency/services/mortgages/down-payment.html)). On a $543,800 condo that is $29,380. On a $714,700 townhouse it is $46,470. With less than 20% down, a buyer typically has to buy mortgage loan insurance. A 20% down payment is $108,760 on that condo and $142,940 on that townhouse. ## How the gift works ### The money is a loan to you, and the gift isn’t taxed The reverse mortgage money is a loan to you, not income, so it isn’t taxed. Giving it to your child isn’t taxed either. Canada has no gift tax, and the Canada Revenue Agency lists most gifts and inheritances among the amounts that are not reported or taxed ([Canada Revenue Agency](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/amounts-that-taxed.html)). The money goes into your bank account, and you pass it to your child. Your child’s name never goes on your mortgage, and your child owes the reverse mortgage lender nothing. ### Your child’s lender will ask for a gift letter Lenders usually ask the parent to sign a gift letter. It says the money is a gift, not a loan, and that it does not need to be repaid ([CMHC](https://www.cmhc-schl.gc.ca/professionals/industry-innovation-and-leadership/industry-expertise/resources-for-mortgage-professionals/mortgage-application-tips-what-your-mortgage-professional-needs-to-know)). A gift from a relative that doesn’t have to be repaid is an accepted source of a down payment for an insured mortgage ([CMHC](https://www.cmhc-schl.gc.ca/consumers/home-buying/mortgage-loan-insurance-for-consumers/what-are-the-general-requirements-to-qualify-for-homeowner-mortgage-loan-insurance)). A gift letter only fits money you don’t expect back. If you’d rather lend the money, talk to your lawyer before anything is signed. ## Keeping it fair, and keeping enough for yourself Talk with all of your children together before you decide. Copying each of them on the same emails means no one hears the numbers from someone else. Some parents give each child the same amount at the same time. Others give to one child now and write down the amount, so the will can make things equal later. A lawyer can help you word it. Your own needs come first. You never have to take the full amount you qualify for, and anything you don’t take costs nothing. Keeping some in reserve leaves room for repairs or [care at home](/paying-for-home-care-toronto/) in later years. The [Toronto reverse mortgage calculator](/tools/reverse-mortgage-calculator-toronto/) shows how different amounts compare. Timing matters too. A retirement holds a limited number of healthy, active summers, the years with the energy to travel, take on the house projects and keep up with the grandchildren. A gift given now arrives while you can watch it help. ### Example: a $110,000 gift from a $1,171,800 East York house Take an illustrative couple, aged 74 and 70, in a mortgage-free detached house in [East York](/service-areas/east-york/). The TRREB benchmark price for a detached house in the district that covers most of East York (E03) was $1,171,800 in September 2026. With the younger spouse at 70, they could qualify for up to about 53% of the home’s value, about $619,000 ([how much a 70-year-old can borrow](/guide/how-much-can-a-70-year-old-borrow-toronto/)). Their daughter is buying a condo apartment at $543,800, the City of Toronto benchmark. They take $110,000 once and give it to her, which covers a 20% down payment of $108,760. They sign a gift letter for her lender, and their son is copied on every email. At 6.49% a year, the highest advertised five-year fixed rate on October 31, 2026, the $110,000 would grow to about $208,000 in 10 years. If the house were still worth $1,171,800 then, about $964,000 of its value would still be theirs, and more if prices rise. The other $509,000 or so they qualified for was never used. ## What it costs and how it is paid back A gift is usually taken as one amount, so interest starts on all of it from day one. The lenders’ advertised five-year fixed rates were 6.23% to 6.49% when checked on October 31, 2026, roughly 2 to 2.5 percentage points above regular mortgage rates. Setting up the mortgage costs about $2,000 to $3,500, once: an appraisal (usually about $350), the lender’s set-up fee ($995 to $1,795, usually added to the mortgage) and your own lawyer for independent legal advice. The lawyer charges about $800 to $1,200 in Ontario, not the $300 to $500 that lender paperwork often shows. The [Toronto cost guide](/guide/reverse-mortgage-cost-toronto/) explains each cost. There are no required monthly mortgage payments. Interest is added to the balance and compounds twice a year, so the balance grows. Home price growth often makes up some or all of it, and Canadian borrowers keep about half of their home’s value on average. Nothing has to be repaid until the home is sold, the last borrower moves out for good, or the last borrower dies. You or your family keep every dollar above the balance. Under the no negative equity guarantee, you or your estate never owe more than the home’s fair market value on the day the mortgage comes due, as long as property taxes, insurance and upkeep were kept up. Repaying early brings a charge in the first years that shrinks over time, and some lenders let you repay up to 10% a year without one. The [guide to alternatives in Toronto](/guide/alternatives-to-reverse-mortgage-toronto/) covers the other ways to get money from a Toronto home. ## What's included when you ask for help - ✓A free estimate that doesn't affect your credit - ✓Every reverse mortgage lender in Canada compared for you - ✓The best deal for your home and your gift, by email - ✓Each of your children copied on the same emails - ✓Family calls by phone or video call, with you making the decision - ✓Help choosing a gift that leaves room for your later years - ✓A plain explanation of how your balance could grow over time - ✓A free referral to an independent lawyer for your legal advice ## Related guides - [How much can a 70-year-old borrow with a reverse mortgage in Toronto?](/guide/how-much-can-a-70-year-old-borrow-toronto/) - [How much does a reverse mortgage cost in Toronto?](/guide/reverse-mortgage-cost-toronto/) - [What are the alternatives to a reverse mortgage in Toronto?](/guide/alternatives-to-reverse-mortgage-toronto/) ## Sources Figures checked October 31, 2026. 1. [TRREB, Market Watch, September 2026 (MLS HPI benchmark prices, City of Toronto and district E03, p. 26)](https://trreb.ca/wp-content/files/market-stats/market-watch/mw2609.pdf) 2. [Financial Consumer Agency of Canada, How much you need for a down payment](https://www.canada.ca/en/financial-consumer-agency/services/mortgages/down-payment.html) 3. [Canada Revenue Agency, Amounts that are not reported or taxed](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/amounts-that-taxed.html) 4. [CMHC, General requirements to qualify for homeowner mortgage loan insurance (down payment sources)](https://www.cmhc-schl.gc.ca/consumers/home-buying/mortgage-loan-insurance-for-consumers/what-are-the-general-requirements-to-qualify-for-homeowner-mortgage-loan-insurance) 5. [CMHC, Mortgage application tips (gifted down payments need a signed letter saying the gift is non-repayable)](https://www.cmhc-schl.gc.ca/professionals/industry-innovation-and-leadership/industry-expertise/resources-for-mortgage-professionals/mortgage-application-tips-what-your-mortgage-professional-needs-to-know) ## How it works, from first question to money in your account Seven steps. You can stop at any of them, and nothing is signed until the last two. 1. 01 Free estimate The free estimate form asks about you, your Toronto home and anything owing on it. It takes about 90 seconds and doesn't affect your credit. 2. 02 Every lender compared Richard Hopkins, Mortgage Broker, compares every reverse mortgage lender in Canada for your Toronto home. In his first email you see the most your home could provide and the lenders that suit it, and he asks how much you want. 3. 03 Application Once you've chosen an option, fill out a quick form and send a few documents. Your credit is checked once, and your application goes only to the lender you choose. 4. 04 Approval The lender usually sends its mortgage commitment letter within a day or two. 5. 05 Appraisal A professional appraiser visits the home to confirm what it is worth. 6. 06 Independent legal advice Your own lawyer, who works for you and not the lender, goes through the mortgage with you before anything is signed. 7. 07 Closing The lender sends the money to the lawyer or title company doing the closing. They pay off your current mortgage, any other debts on the home and the costs, then deposit the remaining money into your bank account. ## Frequently asked questions **Is a living inheritance taxed in Canada?** No. Canada has no gift tax, and the Canada Revenue Agency lists most gifts and inheritances among the amounts that are not reported or taxed. The reverse mortgage money is a loan to you, not income, so it isn't taxed either. If your child invests the gift, the interest it earns is taxable, like any interest. **Does your child need a gift letter for the down payment?** Yes. Your child's mortgage lender will usually ask you to sign a letter saying the money is a gift, not a loan, and does not need to be repaid. The letter also gives the date, the amount and your relationship to your child. Only sign one for money you don't expect back. **How do parents keep a living inheritance fair between children?** It is your decision, and families handle it in different ways. Some parents give each child the same amount at the same time. Others write down each gift so the will can make things equal later, and a lawyer can help word it. Copying all of your children on the same emails means everyone reads the same numbers. **How much of your home's value is left after a living inheritance?** It depends on how much you take, the interest rate and home prices. Interest is added to what you owe, so the balance grows, but rising home prices often make up some or all of it. Canadian borrowers keep about half of their home's value on average, even after many years. The [Toronto reverse mortgage calculator](/tools/reverse-mortgage-calculator-toronto/) shows your own numbers. **Does it cost anything to have a broker compare the lenders for you?** No. You pay the broker nothing. The lender pays the broker after your mortgage funds. A broker also reaches things you can't get by phoning lenders yourself. One of the four lenders works only through brokers, and another offers its highest amounts only through brokers. A broker can sometimes get a rate below the published one, or a lower set-up fee. Richard Hopkins, Mortgage Broker, compares every reverse mortgage lender in Canada, and arranges lines of credit and regular mortgages too, so he recommends the option that offers the best overall value for you. ## Other ways a reverse mortgage is used in Toronto [ Monthly income from your home Money from your home's value, paid into your bank account every month, without tax and without changing your OAS or GIS. Read more → ](/reverse-mortgage-monthly-income-toronto/)[ Buying a condo with a reverse mortgage A reverse mortgage can pay part of the price of your next Toronto condo, so more of your house sale stays in the bank. Read more → ](/buy-a-condo-with-a-reverse-mortgage-toronto/)[ Reverse mortgages on Toronto condos Every lender accepts a standard condo, but each one also reviews your building, so the same Toronto unit can get different answers. Read more → ](/reverse-mortgage-condo-toronto/) --- Free reverse mortgage estimate (no sales pressure): https://torontoreversemortgage.ca/estimate/ Operated by Dominion Lending Centres Homestead Financial, a mortgage brokerage licensed by the Financial Services Regulatory Authority of Ontario, brokerage licence #11711. Independently Owned and Operated. TorontoReverseMortgage.ca is a website of Dominion Lending Centres Homestead Financial, not a separate brokerage. Richard Hopkins, Mortgage Broker, licence M16000896.