Nestco.ca found the number of mortgage applicants with a gift as part of a down payment more than doubled as the pandemic struck
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The number of first-time buyers getting help from family via cash gifts for a down payment has doubled since early last year, recent statistics from an online mortgage marketplace reveal.
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Nesto.ca is an online mortgage marketplace for high-quality borrowers, and it recently compiled data on thousands of its users applying for a mortgage regarding the nature of their down payments.
“If you look at the number of people using gifts for a down payment, it almost doubled since just before the pandemic, and that number has never come back down,” says Chase Belair, co-founder and principal broker at Nesto.ca.
In January and February of 2020, between six and seven per cent of Nesto.ca applications from first-time buyers included a gift from parents or someone else as part of their down payment. Starting in March last year, just as the pandemic struck, the number of applicants with a gift as part of a down payment more than doubled to more than 14 per cent, and that figure has remained steady month-over-month ever since, ranging between about 11 and almost 16 per cent.
Nesto.ca did not have data on why the surge occurred, but Belair posits “people likely got desperate, and no longer wanted to wait to save up more money.”
Nesto.ca statistics on first-time buyers also revealed those with 20 per cent down payments were mostly likely to include a gift (about 16 per cent) followed by those with five per cent down at almost 14 per cent.
“It’s become a really common thing,” Belair says.
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