Buying a home in Alberta right now comes with a lot of advantages, affordable prices compared to many other provinces, a strong job market, low taxes, and steady growth. But even with all that going for it, the biggest hurdle for many people is still saving up the down payment.

A lot of buyers hope their parents can help by gifting them the money. For some families, that works perfectly. But for others, it’s just not possible. Parents may still need those funds for their own retirement, or they simply can’t part with that money permanently. That doesn’t mean the conversation ends there.

Instead of gifting, parents can loan the down payment. It’s completely allowed by lenders in Canada, provided it’s done the right way. The loan just needs to be legally documented with clear terms. And unlike a gift, this option lets parents keep their capital in the long run, while still helping you get into the market now instead of years down the road.

Here’s how it works. The money your parents lend you can be at zero percent interest or at an agreed-upon rate. You can set repayment terms that work for both sides: monthly, annually, a lump sum, or even repayment when you sell the home. It’s flexible, and it can mean the difference between buying now in Alberta’s affordable market or waiting and possibly paying much more later.

The biggest thing to remember is that lenders will treat this as a debt. That means they’ll look at the repayment amount, the interest rate (if any), and the schedule you agree on, and they’ll factor that into your debt servicing when deciding how much mortgage you qualify for. So yes, you still have to qualify for that extra debt on paper. But if the numbers work, it’s often far better than taking out a higher-interest loan from a bank or private lender.

The agreement with your parents should always be in writing. It’s not just to keep things clear between family members—your lender will require it. A solid family loan contract will list the amount borrowed, any interest charged, the repayment terms, and be signed by all parties. Having a lawyer prepare or review the agreement is a smart move to make sure it meets legal and lender requirements.

Let’s take a simple example. Say you’ve saved $40,000 for a down payment on a $400,000 home in Alberta. That’s 10% down, which means you’ll pay default insurance on your mortgage. If your parents loaned you an extra $40,000, you’d reach the 20% down mark. That skips the default insurance and lowers your monthly payments. You agree to repay them over 10 years at zero interest, and the lender counts those repayments in your mortgage application. You get into the market now, and your parents get their money back over time.

This approach works for a lot of different buyers we see at Merge Mortgage Group: people relocating to Alberta from BC or Ontario, newcomers to Canada looking to settle here, and Albertans moving into secondary markets to find better value. In all those cases, the combination of Alberta’s lower home prices and a family loan can make buying much more achievable without waiting years to save.

The key is that everyone feels comfortable with the arrangement. When I work with clients using a family loan, I often suggest a family meeting so we can walk through the numbers together. That way, parents know exactly how the loan will be repaid, the buyer understands how it impacts their mortgage, and everyone leaves feeling confident. It’s not just about qualifying, it’s about protecting relationships and making sure the plan makes financial sense for everyone involved.

The great thing about Alberta right now is that even with a modest down payment, you’re buying into a market that still has room to grow. That means the equity you build over the next few years can put you in an even better position financially, whether you’re planning to stay in your home long term or move up in a few years. And because our province offers lower taxes and a strong job market, the stability makes it easier to take on and repay a family loan without overextending yourself.

So if you’ve been holding off because you don’t have enough saved and your parents can’t gift you the money, it’s worth having a conversation about a family loan. Done right, it can be a win for everyone: parents keep control of their funds, you buy sooner, and the repayment terms can be tailored to fit your situation.

If you’re thinking about going this route, we can help. At Merge Mortgage Group, we’ll walk you and your family through the numbers, show you exactly how the loan will affect your mortgage qualification, and help you structure the agreement so it meets lender requirements. We work with buyers all across Alberta and those relocating here, and we know how to use this strategy to make the most of Alberta’s market conditions.

Let’s talk about your options, run the scenarios, and find the best way to get you into a home without having to wait years to save.

Contact us at mergemortgage.ca to get started.